Jupiter's gold exposure12 May 2020 22:31
Jupiter’s Clunie takes gold to highest ever exposure
Absolute return specialist champions robust impact of precious metal on his strategy - By Chris Sloley Posted 12 May, 2020
Jupiter Asset Management’s James Clunie has sought to ease the pressure on his absolute return strategy by taking gold exposure to the highest level his team has ever had.
This is while two mining stocks are also present, which includes Newcrest Mining being among the top 10 holdings and accounting for 2.7% in the UK fund and 2.6% in the Ucits fund.
The third holding is a position in Barrick Gold. The size of the stake was not disclosed but it is understood overall exposure to gold across the three holdings amounts to around 15%.
In his commentary, Kralj said: ‘The current environment of low interest rates, QE to infinity and debasement of global currencies are the perfect combination for gold, so we intend to keep a reasonable allocation.
‘Gold mining stocks are also performing well after years of underperformance. The industry used to struggle with mismanagement: little attention paid to cost structures, huge capital spending and value-destroying acquisitions.
‘Now, however, we are seeing much more disciplined capital allocation; a very limited number of new mines are being built every year and a big focus on costs has resulted in very low-cost operations, higher returns, solid cash flow generation and stronger balance sheets.’
Kralj added that the consolidation in the industry means the level of management has improved, which means there is less dependence on an inflated gold price to drive long-term returns. In addition, Kralj said, gold remains an important hedge against extreme market outcomes.
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https://citywireselector.com/news/jupiter-s-clunie-takes-gold-to-highest-ever-exposure/a1356104/print?section=global
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