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Creating the Way for specialist funds

Way Fund Management has established two specialist funds that invest in gold mining companies and companies responding to climate change respectively.

The Way Charteris gold portfolio fund invests mainly in blue chip gold mining companies with market capitalizations above $2bn, but up to 10 per cent will be invested in smaller firms and mining businesses in other commodities, minerals and precious metals. The fund will contain around 25 stocks and also has the ability to hold cash and physical gold.

Way has appointed Charteris Treasury Portfolio Managers chairman and chief executive Ian Williams to manage the fund. Williams, who started his investment career in 1975, has managed the City Financial Gilt Fund since launch in December 2006.

Way says that despite a recent correction, the case for investing in gold remains strong. It can be used as a hedge against the weak US dollar and many central banks are intending to increase their gold reserves rather than selling them. Gold consumption is increasing in India and China, while gold production is not meeting this consumption. If demand continues to exceed supply, prices will rise.

Unlike the gold portfolio fund, the Way green portfolio fund is a fund of funds. It invests initially in 10 funds with strong track records in sectors such as forestry, clean water and alternative energy.

Way chose this structure to reduce the risks of investing directly in firms that are tackling and responding to environmental issues. When constructing the portfolio, manager Duncan Carmichael-Jack of Vestra Wealth will work closely with the research company, Ethical Screening.

At a time when multi-asset investing is a popular concept, Way’s new funds could equip IFAs with the ability to diversify through specialist managers while maintaining overall control of clients’ asset allocation.

However, the gold fund may reflect the performance of equities rather than the underlying price of gold.

Investors in the green fund must also rely on the manager to pick the right blend of funds and sectors to reduce risk, as the environmental sector is relatively new and can be volatile.

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