In focus
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[ SECTOR PROFILE ]
Gold standard
Given that gold performs so differently
to other commodities, John Husselbee,
head of multi asset at Liontrust, treats
it as a separate asset class altogether.
He separates alternatives into four
categories – property, absolute return,
hedge funds and commodities – yet
gold does not sit in the latter.
“For me, gold sits in the hedge funds
category,” he says. “Hedge funds can
hedge things to produce different
types of growth, to protect capital, to
produce a different type of income
and to hedge against inflation and
“Given where we are in the
interest rate cycle, with
inflation set to rise and
negative yields across the
globe, now may be a good
time to add gold”
currencies. This is where gold sits.
Given where we are in the interest rate
cycle, with inflation set to rise and
negative yields across the globe, now
may be a good time to add gold.”
When it comes to more general
commodities, Husselbee says the asset
Source: FE Analytics
PERFORMANCE OF FUND VS INDEX IN 2020
S&P GSCI Gold Spot (17.62%) BlackRock Gold & General (14.11%)
30%
20%
10%
0%
-10%
-20%
-30%
Jan20
Feb
Mar
Apr
Source: FE Analytics
PERFORMANCE OF SECTOR VS INDEX OVER 20YRS
IT Commodities & Natural Resources (214.36%) MSCI World (193.39%)
800%
700%
600%
500%
400%
300%
200%
100%
0%
-100%
Jan00
Jan02
Jan04
Jan06
Jan08
Jan10
Jan12
Jan14
Jan16
Jan18
“The question is, are you
brave enough to throw all
your eggs in one basket
and back the energy and
oil trade, or will you be
diversified and go for the
basket of commodities?”
class tends to feature in his multi-asset
funds at the higher end of the risk
profiles, with exposure limited to no
more than 5 per cent. However, having
been underweight going into the
recent crisis, he is now looking to move
this position to a more neutral stance.
“As an asset class per se, we believe
commodities have a return, risk and
correlation profile that is attractive
in a multi-asset portfolio,” he
says. “Clearly, when you have the
demand and supply shocks that we
have seen recently, it is not good
for commodities in the short term;
however it has made them very
cheap. The question is, are you brave
enough to throw all your eggs in one
basket and back the energy and oil
trade, or will you be diversified and
go for the basket of commodities?”
Husselbee has gone down the
basket route for his commodities
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