Why I've sold gold to buy this fund

by Douglas Chadwick from interactive investor |

After making a turn on a gold fund, the Saltydog analyst has bought back into this low volatility idea.

This content is provided by Saltydog Investor. It is a third-party supplier and not part of interactive investor. It is provided for information only and does not constitute a personal recommendation.

Cutting back on Gold

Last October I highlighted the Investec Global Gold fund. Stock prices were going down, so we had reduced our exposure to the equity markets and were looking for somewhere else to invest.

The gold funds had started to show up in our analysis and so we made a modest investment.

This was a fund that had done very well for us in the past but had fallen significantly since its peak in 2016.

There was talk of interest rates going up, the end of quantitative easing and the beginning of quantitative tightening. The outcome of Brexit was unclear, and the US and China were locked into a trade war. It looked as if global equities might be in for a tough time and gold might benefit.

Since the beginning of October 2018, the Investec Global Gold fund has gone up by 20%, but it has fallen back in the last few weeks. It did a similar thing at the beginning of the year, when it dropped 8% in two weeks, but then recovered. It might do the same again this time, but, unfortunately, we've no way of knowing. We have decided to reduce our holdings just in case it falls further.

Over the last three months we've seen the UK Equity & Bond Income, £ Corporate Bond and £ Strategic Bond sectors all making gains. These are all in our 'lower volatility' Slow Ahead Group.

One fund that has caught our eye is the Allianz Strategic Bond.

We invested in it at the beginning of February, but then sold it when it stagnated for a couple of weeks. We're now going to give it another go.

For more information about Saltydog Investor, or to take the 2-month free trial, go to www.saltydoginvestor.com

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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