The SF T1ps smaller companies gold fund will be managed by Tom Winnifrith and Robert-Sutherland Smith, who run the T1ps smaller companies fund and Worship Street investments.
Winnifrith is a small cap share tipster who turned his hand to fund management in 2007. He has been looking at small caps for almost 17 years, while Sutherland Smith has worked in the City for over 40 years.
Rivington Street Holdings chairman Malcolm Burne, who has a number of years experience in the mining sector, will provide advice. Burne has previously run golden prospect precious metals, a closed-ended fund providing exposure to gold and precious metals. He has also been a director of over 20 companies, many of which have been in the mineral resources and gold exploration fields.
The new fund aims for diversity in terms of the stages of company development. It will invest at least 80 per cent in companies involved in the mining, exploration, development, and production of gold, with the remaining 20 per cent focusing on companies involved in silver and other precious metals. Up to 40 per cent of the portfolio can go into companies listed on the Australian and Toronto stock exchanges.
Gold could be a good investment over the long term because supply constraints and increasing demand from emerging regions and investors could push prices up. The focus on smaller companies could enable the fund to benefit from the lag in gold stock prices relative to the price of physical gold identified by Nimrod Capital, which is launching a closed-ended fund in this area of the market.
Gold is often used by investors as a hedge against weak currencies and inflation, but if investor demand dries up, prices could fall.