the gold market pioneer - aureus fund · 2017. 11. 8. · the european sovereign debt crisis in...
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The Gold Market Pioneer
Aureus Fund (Ireland) plc.
The First Gold Fund in the World
Established 2002
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Long-term experience in the Gold market
The world’s first gold focused fund
2
Aureus Fund
ZKB Gold ETF
Lyxor Gold
Bullion Sec.
ETS Securities
Xetra Gold
Hansagold
Promont Golden
Julius Bär
Solit Gold&Silver
Credit Suisse
SPDR Gold Shares
RBS physical Gold
Lion Global Gold Fund
E-Fund Gold
iShares Gold
Euwax Gold
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
The Aureus Fund at a glance
3
No credit risk
Diversified portfolio of gold, silver, platinum and palladium, with an up to 60% share of gold
Precious metals are safely stored with Credit Suisse in Zurich, Switzerland
Strong performance versus other precious metals funds
Competitive fee structure versus other precious metals funds
Aureus Fund (Ireland) plc. | © 2016 |
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Aureus Fund (Ireland) plc.
5
The bullish case for Gold
•
The benefits of white precious metals
Aureus Fund (Ireland) plc. Best of both worlds: Portfolio insurance and return
Geopolitical hedge
Storage of wealth in THE safe-haven investment
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Global QE reaches limits and has
led to increased financial
instability.
Negative yielding and QE end up in
a depreciation war…
A1
Source:
Bloomberg, LBBW AM
Where Gold is the only storage of wealth
6
Only the Yen has held its value since
the global financial crisis, but is
expected to depreciate in the future
due to a shift to fiscal stimulus and
wage growth.
50
70
90
110
130
150
170
190
210
230
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Gold/USD EUR/USD GBP/USD
AUD/USD JPY/USD
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
-2
0
2
4
6
8
10
12
2011 2012 2013 2014 2015 2016
Dividend Yield of European Equities European Corporate Bond Yield
German Government Bond Yield European High-Yield Bond Yield
… and monetary policy has led to
mispricing of risks
7
A1
Return-free risk instead of risk-free return
Significant decrease in
yield results in hunt for
yield asset bubbles?
Source:
Thompson Reuthers Datastream, LBBW-AM
Yields of the last five years as of 24.10.2016
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
QE and negative interest rates
have failed to stimulate economies
-10
-5
0
5
10
15
20
GDP growth China
GDP growth USA
GDP growth EU
GDP growth Japan
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Fiscal policy is due to jump in
Continuously low interest
rates, mispricing of assets, risk
of asset bubbles as a result of
hunt for yield
Gold as an insurance against risks of inflation and asset price bubbles!
More expansive fiscal policy in response to missing economic
stimulation can result in
If fiscal policy is successful
Inflation, potentially even
hyper inflation
If fiscal policy fails
1 2
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
If fiscal spending results in high inflation, the
gold price is likely to rise
A1
0
2
4
6
8
10
12
14
16
050
100150200250300350400450
Gold in USD (lhs)
US CPI (rhs)
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
2007 2008 2009 2010 2011 2012 2013 2014 2015
billio
n U
SD
World public debt
Above-ground gold stock
Source:
Economist, GFMS, WGC, LBBW AM, Bloomberg
As of YE 2015
+90%
+13%
Gold cannot be mined
as fast as money can be
printed.
Gold is a scarce
resource, serving as
inflation hedge.
1
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
If fiscal spending fails and asset bubbles burst,
gold would be appreciated as storage of wealth
Source:
Bloomberg, LBBW AM
A1
2
…as seen at the end of
the housing bubble and
the European sovereign
debt crisis in recent
years, the gold price
increased alongside
increasing credit risk,
when the bubbles burst
(i.e. the stock market
collapsed)
Source:
Bloomberg, LBBW AM
30
80
130
180
230
1700
2200
2700
3200
3700
4200
4700
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Euro Stoxx 50 (lhs) ITRAXX Europe 10 Year (rhs)
30
80
130
180
230
550
750
950
1150
1350
1550
1750
1950
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Gold in USD (lhs) ITRAXX Europe 10 Year (rhs)
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Gold is furthermore appreciated as storage
of wealth in times of geopolitical crises
A2
200
400
800
1600
1979 1984 1989 1994 1999 2004 2009 2014
Gold in USD
Arab Spring
2. Gulf War Irak War
1. Gulf War
Soviet-
Afganistan
War
Source:
Bloomberg, LBBW AM
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Gold is THE safe haven in times
of uncertainty!
13
The known unknowns!
…. then there are still the
unknown unknowns !
Unce
rtain
ty
High
Low
Decreasing Performance of Gold Increasing
Source:
Bloomberg, LBBW AM
A2
Brexit
Path
Uncertainty
US
President
Trump
Loss of
confidence
in the
monetary
system
Rebuilding
confidence
in the
system
Central
Bank QE
Programs
Collapse of
banking
system in
Italy
Continuing
Fed rate
hikes
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Aureus Fund (Ireland) plc.
14
The bullish case for Gold
The benefits of white precious metals
• Benefits of a diversified precious metals portfolio compared to a Gold-only investment
• Diversification adds performance
Aureus Fund (Ireland) plc. Best of both worlds: Portfolio insurance and return
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Silver
15
B1
Beta play on Gold
Source: Bloomberg, LBBW AM
100
300
500
700
900
1100
1300
1500
1700
1900
2100
2300
2500
0
5
10
15
20
25
30
35
40
45
50
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Silver in USD (lhs) Gold in USD (rhs)
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
0
50
100
150
200
250
300
350
2007 2008 2009 2010 2011 2012 2013 2014 2015e2016e
Automobile Electronics Chemistry
Dentistry Jewellery Investment
Other Supply
Source: GFMS, Johnson Matthey plc.,
LBBW Research
0
50
100
150
200
250
300
350
2003 2006 2009 2012 2015e
Automobile Chemistry
Other Jewellery
Investment Supply
16
Platinum Palladium
Platinum
~13%
Palladium
~40%
B1
Platinum & Palladium: Geographically concentrated mine
production can’t match demand
Platinum
~77%
Palladium
~38%
de
ma
nd in
to
nn
s d
em
an
d in
ton
ns
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
If you trust in Gold never forget
the white precious metals
17
B2
*First publication of the palladium-fixings on Bloomberg
The composition of the diversified basket corresponds to the holdings of the Aureus Fund
Source: Bloomberg, LBBW AM
Performance since March 1992*
In times of an
increasing Gold price,
the white precious
metals tend to
outperform and
provide benefit to a
diversified
precious metals
portfolio like the
Aureus Fund! 0
100
200
300
400
500
600
700
800
900
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Gold in USD diversified precious metals basket (monthly rebased)
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Aureus Fund (Ireland) plc.
18
The bullish case for Gold
The benefits of white precious metals
Aureus Fund (Ireland) plc. Best of both worlds: Portfolio insurance and return
• Means to decrease portfolio risks due to diversification effects based on
low correlation between asset classes like equities and the Aureus Fund
• Outperformance versus peers
• Absence of credit risks in contrast to ETF products
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Diversified precious metals portfolio
as an investment philosophy
Aureus Fund (Ireland) plc. was established in 2002 in Ireland as an open-ended
investment company with variable capital (Irish Retail Fund).
The Aureus Fund is now an Alternative Investment Fund (AIF), investing in 4
physical precious metals:
Gold 59,5%
Silver 13,5%
Platinum 13,5%
Palladium 13,5%
19
C1
59,5%
13,5%
13,5%
13,5%
Gold Silber Platin Palladium
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
0
50
100
150
200
250
300
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Euro Stoxx 50 (lhs)
Aureus Fund (rhs)
Aureus Fund shows low
correlation with equities*
20
C1
* Since 2007, no significant mining stocks holdings.
-1
-0,5
0
0,5
1
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Correlation
ave. Correlation
Average correlation below zero!
*Since 2007, Aureus has
had no significant holdings
in mining companies
Source:
Bloomberg, LBBW AM
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
1500
2000
2500
3000
3500
4000
4500
5000
-7
-6
-5
-4
-3
-2
-1
0
1
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Volatility reduction in % (lhs) Euro Stoxx 50
21
C1
Adding the Aureus Fund can reduce a
portfolio’s volatility A 10% share in Aureus reduces an equity portfolio’s
volatility significantly, esp. in declining equity markets
Source: Bloomberg, LBBW AM
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
If you want a precious metals fund,
Aureus is the one to choose
22
Source: Bloomberg, LBBW AM
C2
Outperformance of peers due to allocation adjustments
(over-/ underweighting) in reaction to market conditions
70
80
90
100
110
120
130
140
150
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17
AUREUS FUND SAFE PORT PRECIOUS METAL 95E ETFS PHYSICAL PM BASKET
HANSAGOLD-EUR OFI PRECIOUS METALS-R
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
As per Prospectus
The repurchase (and subscription) per Share is based on the Net Asset Value per Share
calulated at the Valuation Point for the relevant Dealing Day.
No spread, subscription and repurchase daily on NAV.
23
C3
Aureus Fund (Ireland) plc.
ETCs
Watch the spread
Metal Securities issued or redeemed by Authorised Participants, subject to conditions.
Security Holder
Authorised
Participants
Metals
Securities
Authorised
Participants
Agreements Market-making
Issuer
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 | 24
C3
Aureus Fund (Ireland) plc. Certificates (ETC)
Funds vs. Certificates
Aureus Fund ETC
Insolvency No issuer default risk Issuer default risk, as long as
there is no ring fencing
Legal structure Open-ended alternative
investment fund
Exchange traded commodity
(ETC) – Index Certificate
Domicile Ireland Jersey
Active Management Yes Yes
Physically allocated
metals
Yes, Zurich Yes, London
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Fund investments are backed by physical precious metals stored
with Credit Suisse in Zurich, Switzerland.
Unlike peers, precious metals are not lent to third parties.
The physical holdings are stored in so called segregated metal
depots in London Good Delivery Bars (standard bars, c. 12.5 kg).
25
C3
Metals are securely stored in
Switzerland…
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
The vault visit takes place annually by Board Members
of the Aureus Fund.
All bars are counted and randomly selected bars will be
weighted by Board Members.
The major institutional clients of Aureus are invited to
attend annual precious metal site visits in Zurich.
26
C3
… and a vault visit is held annually
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Launched in Ireland in 2002
Both independent and long experienced Irish Board
Members have been working on the Board from the very
beginning
Irish Administrator, Custodian and Trustee
A & L Goodbody as the Irish legal advisor
PwC as the Irish Auditor
27
C3
Ciste Déanta in Éirinn
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 | 28
C3
Aureus Fund ETC Mining Fund
Spread No spread Spread No spread
Redemption Daily at NAV // Governed by Regulator &
Prospectus
Secondary market / Broker Daily at NAV // Governed by Regulator &
Prospectus
Insolvency No issuer default risk Issuer default risk No issuer default risk
Legal structure Open-ended fund Exchange traded
commodity (ETC)
Open-ended fund
Domicile Ireland Jersey Luxembourg
Physically allocated
metals
Yes, Zurich Yes, London No
Physical precious metals Mining
At a glance
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Fund data
Aureus Fund
29
• IE0031772803 ISIN
• AUREUSF ID equity Bloomberg Ticker
• Physical precious metals (at least 95%) Investment Policy
• Euro Fund currency
• 0.70% Management Fee
• 1.15% TER
• €260m Fund Volume (as of 31.10.2016)
• Gold, Silver, Platinum, Palladium: 59,5%/13,5%/13,5%/13,5%
Reference
• 18.09.2002 Established
• LBBW Asset Management Investmentgesellschaft mbH Fund Manager
• Tresides Asset Management GmbH Advisor
• State Street International (Ireland) Limited Custodian
• Credit Suisse AG, Zurich Sub-Custodian / Storage
Aureus Fund | The Gold Market Pioneer
Aureus Fund (Ireland) plc. | © 2016 |
Disclaimer
30
This presentation constitutes advertisement and serves to describe our services and the respective products. This document is
intended for professional investors only. The information contained in this document does neither constitute any investment
advice nor advice on the buying or selling of said products, it is merely a brief summary of key aspects of the funds. This
information should not be regarded as a substitute for obtaining individual advice. The information contained herein has been
carefully compiled by us and is based on generally accessible sources that we deem reliable. However, we are unable to
assume any liability for the actuality, completeness and correctness. The presentation of historical data or the illustration of
awards for the performance of the product provides no information about future performance. The performance shown above
does not take into account fees and costs that are included in the subscription and redemption of shares. All expressions of
opinion reflect the current views of our company and may be changed at any time without prior notice. The sole legally binding
basis for purchasing/selling/swapping investment shares is the latest valid sales prospectus containing the terms and
conditions, in conjunction with the most recent semi-annual and/or annual fund report. These documents are available in
English, free of charge, in electronic or print versions from our advisor or at LBBW Asset Management Investmentgesellschaft
mbH, P.O. Box 10 03 51, 70003 Stuttgart, Germany, E-Mail: info@LBBW-AM.de or Investors Trust Europe, a State Street
Company, No. 78 Sir John Rogerson`s Quay, Dublin 2, Ireland, E-Mail: info@aureusfund.com or at www.aureusfund.com.
The shares of the product may only be offered for purchase, or sold, in legal systems where such an offer or sale is permitted.
The fund is not registered or licensed under applicable U.S. financial services laws and regulations and must not be sold to US
citizens. The products may not be offered, sold, transferred or transmitted, neither directly nor indirectly, in the US or in any
other jurisdiction the product is not licensed.
Aureus Fund (Ireland) plc. | © 2016 |
Investment Manager: LBBW Asset Management Investmentgesellschaft mbH Fritz-Elsas-Straße 31 70174 Stuttgart
In case of any questions please contact us on
the Email address:
commodities@Lbbw-am.de
Further information can also be found on our homepage:
www.aureusfund.com
Aureus Fund (Ireland) plc. | © 2016 |
Annex
History of the open EU-AIF Aureus Fund
(Ireland) plc.
The Order process
The Investment Limits
Aureus Fund (Ireland) plc. | © 2016 |
History of the open-
ended EU-AIF
In order to comply with EU Directive 2011/61/EU,
the Aureus Fund (Ireland) plc. applied for a Retail
Investor Alternative Investment Fund (RAIF) licence
in Ireland in July 2014.
In Germany, the Aureus Fund (Ireland) plc. can be
distributed to professional (institutional) clients only.
In anticipation of the diversification requirements of
the new German Investment Tax Act of 2014, the
ratio of Silver, Platinum and Palladium was
increased in December 2013.
Since December 2013, the Aureus Fund (Ireland)
plc. invests predominantly (more than 51%) in
physical allocated Gold. In practice, management
intends to hold allocated Gold close to the
maximum level of 60% of NAV.
Aureus Fund (Ireland) plc.
The Aureus Fund (Ireland) plc. Intends to invest at
least 95% in allocated precious metals and is neither
a bond nor a ETC/ETN.
Aureus Fund (Ireland) plc. | © 2016 |
The order process
NAV Order:
There is no active secondary market on the Irish Stock Exchange. Orders
should only be placed with the „LBBW Fund Settlement Department“ in
Stuttgart as a „Fund NAV trade“.
Trading Details are only valid for NAV Orders via LBBW Kommissionshandel.
Different rules might apply for order routed via third parties.
Cut-off: 2 pm (German Time)
Value = Trading Day +2 Business Days.[1]
NAV will be published one business day after the trading day.
Example:
Order on: Wednesday (cut-off 2 pm German time)
Valuation of precious metals at specific pm-fixing [2]:
Wednesday (4 pm German time)
NAV published: Thursday
Value day: Friday
Please note: The Aureus Fund (Ireland) plc. has
deposited a Global Certificate with Clearstream
Banking and can easily be settled within the
Clearstream Banking System.
Order placement via LBBW / Network
Management and Operations
Services:
FAX-Number: +49 711-127-75396
Phone Trading Investment Funds:
+49 711-127-78908
ISIN: IE0031772803 [1] NAV orders for settlement in Clearstream can only be placed with LBBW. Please contact us
for non-Clearstream trades on the Fund’s register.
[2] Business days are days on which retail banks are open for business in Dublin & Stuttgart
(see Definition Prospectus), subject to change.
[3] Gold: 4 pm German time; other assets might be valued at different times.
Aureus Fund (Ireland) plc. | © 2016 |
Investment Limits
At least 95% of NAV will be held in physical
precious metals in Switzerland
Gold:
Minimum 50%
Target 59,5%
Maximum 60%
White metals:
Minimum 5%
Target 13,5%
Maximum 30%
Silver Target 13,5%
Platinum Target 13,5%
Palladium Target 13,5%
Prospectus and Internal
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