Stockbroking and investment group Argonaut will launch its third fund next week, focusing on the hard-hit gold sector as a counter cyclical play.
Stockbroking and investment group Argonaut will launch its third fund next week, focusing on the hard-hit gold sector as a counter cyclical play.
The Argonaut Australian Gold Fund, to be managed by David Franklyn, is targeting initial investment at $5 million with ultimate fund size of $50 million.
“Broadly we think it is a good counter cyclical opportunity to invest in gold equities right now,” said Mr Franklyn.
Mr Franklyn said the fund sought to capitalise on the relative underperformance of Australian gold equites versus the Australian gold price.
“The time to buy gold shares is when they are out of favour,” he said.
“Gold equities represent compelling long-term value and we believe we can build a high quality portfolio that will deliver strong investment returns over time.”
He said that despite the Australian dollar gold price rising by 9 per cent during the past year, Australian gold equities have fallen by more than 20 per cent against a backdrop of increased geopolitical tensions and inflationary pressures.
“There has been decimation across the sector,” Mr Franklyn said;
“The big picture is we think we are entering an era of increased global tension and geopolitical risk.
“We think gold will have its time in the sun again.
“It is hard to predict when.”
Argonaut said the new fund will have at least 50 per cent of its investments in local based gold producers because Australia was the second biggest gold producer globally and ranked as one of the best locations to operate resource projects.
The launch of the Argonaut Australian Gold Fund is the first new fund since Mr Franklyn was recruited in 2020 to start the group's fund management division.
It has two existing vehicles one focused on the broad natural resources theme and the Perseus fund which targets small cap companies in the resources sector.
The Perseus fund predates the arrival of Mr Franklyn but had been dormant at the time and had subsequently been repositioned with an expanded investment mandate.
