View more on these topics

City Financial’s Harris ups gold exposure

City Financial head of multi asset Mark Harris has increased his exposure to both gold and gold miners.

Harris has gone from holding no gold at all to holding nearly 10 per cent of his portfolio in gold, increasing exposure through an exchange-traded fund and with 4 per cent in gold equities via the iShares Gold Producers Ucits fund.

Harris believes the worst is over now that gold has dropped to a price per ounce of $1,223.90 (£746) as of 9 January.

Harris says: “We may have seen the worst in downside momentum for most commodities. We now believe gold has seen the worst of its setback and we have increased exposure.”

Harris believes the equity bull run will not continue and is using his gold exposure as a hedge. But he is aware how gold has suffered and admits he would have gone for a different hedge had he been able to find a less volatile option.

Harris says: “I have to say it gives me an obvious sense of unease. It is not the perfect hedge.

“I am worried about risks in the market but this is still a good way to hedge. It would not surprise me if equities suffered a correction in Q1.”

Chelsea Financial Services managing director Darius McDermott says: “It is a brave call. Not wrong, but brave. I have had some gold so I know it can be painful to hold it. But right now there is valuation support.

“If gold goes up then we will see substantial rewritings of gold equities. There are now low cost producers and we could see some mergers and acquisitions activity. But you do have to treat gold and gold equities differently.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com