HSBC Global Asset Management moved 5 percent of its Wealth Opportunities fund into gold miners as the bank bets on higher prices of both equities and the metal.
The shares were bought through a basket of miners, Charles Morris, who oversees about $2.2 billion in London, said today by phone, without specifying what the index was. The fund, which previously held no gold equities, still has 6 percent invested in physical bullion, he said.
Immediate-delivery gold climbed 10 percent last year, an 11th consecutive annual gain, and reached a record $1,921.15 an ounce in September. The NYSE Arca Gold Miners Index advanced 9.7 percent this month after last year’s 16 percent drop, the first decline since 2008. The global economy will grow 3.3 percent this year, the International Monetary Fund estimates.
“It’s a risk argument and we’ve just increased risk over the last month quite considerably,” said Morris. “Gold shares are two-thirds shares and one-third gold. We take a bullish view on the stock market for this year.”
Investors own 2,371.2 metric tons of bullion through exchange-traded products, valued at $133 billion, data compiled by Bloomberg show. The holdings are within 1 percent of last month’s all-time high. Gold is up 12 percent in January at $1,744.05 in London, the best start to a year since 1980.
“Gold is the strongest trend on the planet,” Morris said. “In the last 10 years, there is no greater trend than gold and there’s no sign of that reversing.”