There Is Still Value In Gold As A Portfolio Diversifier - Sprott Asset Management
(Kitco News)- There is still lots of value in the gold market as priceshold near a four-month high, according to the manager of the third largestgold-backed investment firm in North America.
John Ciampaglia, CEO of Sprott Asset Management (SAM), saidin an interview with Kitco News that he sees last year’s 12% rally in gold as thestart of a bigger long-term move, adding that investors are starting to viewgold as an important portfolio diversifier.
“If you asked people what gold has done in the last coupleof years people probably would have said ‘it hasn’t done much,’’ he said. “But,I think gold has quietly done what it is supposed to do. We think the market isvery constructive and we think it’s prudent to have some exposure to preciousmetals.”
Ciampaglia’s comments come as SAM secured its position asthe third biggest gold-backed exchange traded product, after it finalized itstakeover of the Central Fund of Canada, launching the Sprott Physical Gold andSilver Trust (NYSE: CEF) Jan. 16.
The new acquisition boosts the firm’s assets undermanagement by almost C$4.3 billion dollars to C$11.5 billion. SPRD Gold Shares(NYSE: GLD) and Blackrock’s iShares Gold Trust (NYSE: IAU) are the only fundsthat are bigger than Sprott’s newest investment vehicle.
Given the headwinds from record equity valuations, higherinterest rates and growing exposure of alternative investments like bitcoin,Ciampaglia said the gold market has been very constructive, seeing consistentreturns, relatively to the investment risk.
“I don’t think it’s too late to get into the gold market,even after the gains we have seen,” he said. “We think gold prices are going upin a sustainable manner.”
The launch of the Sprott Physical Gold andSilver Trust ended what was a fairly long acquisition process. In June aspecial advisory committee from the Central Fund of Canada originally opposed theinitial takeover bid. However, Sprott was eventually able to overcome theissues with Central Fund shareholders voting overwhelmingly in favor of thetakeover.
By Neils ChristensenFor Kitco News
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nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.