A P R I L 2 0 2 0

World Gold ForumCharlie Morris, Head of Multi Asset

2

AT L A N T IC H O U S E

Gold remains the best performing asset class of the 20th century

Source Bloomberg: Gold, Barclays 10+ US Treasuries TR, Barclays 15+ TIPS TR, S&P 500 TR, Emerging markets TR and EAFE TR since 1/1/2000 rebased

EAFE

US

TSYTIPS

EM

Gold

3

AT L A N T IC H O U S E

Key driver for gold price has been falling bond yields.

Source Bloomberg: Gold, Barclays 10+ US Treasuries TR, Barclays 15+ TIPS since 1/1/2000 rebased

TSYTIPS

Gold

4

AT L A N T IC H O U S E

While inflation has been relatively stable, yields have fallen causing real yields to fall. That is the key driver for gold.

Source Bloomberg: 10-year US Treasury yield and 10-year US breakeven rate since 31/8/1998

US 10-year bond yield

US 10-year inflation expectations

5

A D D IN G VA LU E

In 2014, I first modelled gold as a bond with the following characteristics:

‒ It is zero-coupon because it pays no interest.

‒ It has a long duration because it lasts forever.

‒ It is inflation linked, as historic purchasing power has demonstrated.

‒ It has zero credit risk, assuming it is held in physical form.

‒ It was issued by God.

6

AT L A N T IC H O U S E

Falling real rates have been the long-term driver, with corrections when then have spiked.

Source Bloomberg: Gold and the AH gold fair value in US$ since 1998

Gold

Fair value

7

AT L A N T IC H O U S E

Gold premiums to fair value peaked in 2011. 2008 excepted, it tends to rise during bull markets and fall during bear markets.

Source Bloomberg: AH gold premium/discount to fair value since 31/8/1998

8

AT L A N T IC H O U S E

Gold deviations from fair value are also linked to implied volatility. GVZ spikes have coincided with both premiums and discounts.

Source Bloomberg: AH gold premium or discount expressed as a positive and GVZ deviation from 200 day moving average since 7/4/2011

GVZ deviation from trend (lhs) deviation from fair value % (rhs)

9

AT L A N T IC H O U S E

Gold price at a convincing all time high in non-dollar terms

Source Bloomberg: Gold price x DXY Index since 1990

10

AT L A N T IC H O U S E

Most countries have seen new highs for gold. The winners are Turkey, South Africa and Russia (and Brazil, Indonesia, Chile, Argentina…)

Source Bloomberg: Gold price in local currencies as shown since 2005

11

AT L A N T IC H O U S E

Not quite there for gold in US dollars, Swiss Francs and Thai Baht

Source Bloomberg: Gold price in local currencies as shown since 2005

12

A D D IN G VA LU E

Major factors that drive the gold price

‒ Real interest rates

‒ Realized inflation

Other factors that drive the gold price (discount / premium swings)

‒ Volatility

‒ Dollar

‒ Allocation and flows

13

AT L A N T IC H O U S E

Inflation expectations were slow to recover. This time the Fed has acted quickly.

Source Bloomberg: Central bank balance sheets in $ billions since 2006

ECB

BOC

BOJ

Fed

14

AT L A N T IC H O U S E

Inflation expectations were slow to recover. This time the Fed has acted quickly.

Source Bloomberg: US 30-year and 5-year breakeven rates since 26/3/2006

5 year inflation expectation

30 year inflation expectation

15

AT L A N T IC H O U S E

A higher money supply has tended to lift gold

Source Bloomberg: US M2 money supply YoY growth since 1960

16

AT L A N T IC H O U S E

Gold price in US$ forecasts based upon different interest rate scenarios

Source Atlantic House gold price scenarios for 20 year breakeven and treasury yield

20 year bond yield

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

5.00 7,669 6,905 6,220 5,606 5,056 4,562 4,118 3,720 3,361 3,039 2,749

4.50 6,276 5,654 5,096 4,596 4,146 3,743 3,381 3,055 2,763 2,499 2,262

4.00 5,137 4,630 4,175 3,767 3,401 3,072 2,776 2,510 2,270 2,055 1,861

3.50 4,204 3,792 3,421 3,088 2,789 2,521 2,279 2,062 1,866 1,690 1,531

3.00 3,442 3,105 2,803 2,532 2,288 2,069 1,871 1,694 1,534 1,390 1,259

2.50 2,817 2,543 2,297 2,076 1,877 1,698 1,537 1,392 1,261 1,143 1,036

2.00 2,306 2,083 1,883 1,702 1,540 1,394 1,262 1,143 1,036 940 853

1.50 1,888 1,706 1,543 1,396 1,263 1,144 1,036 939 852 773 701

1.00 1,546 1,398 1,264 1,144 1,036 939 851 772 700 635 577

0.50 1,266 1,145 1,036 938 850 770 699 634 575 523 475

0.00 1,036 938 849 769 697 632 574 521 473 430 391

20 y

ear i

nfla

tion

expe

ctat

ions

17

AT L A N T IC H O U S E

Constant real rate scenarios – inflation matters more than yield

Source Atlantic House gold price scenarios for 20 year breakeven and treasury yield

20 year bond yield

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

5.00 7,669 6,905 6,220 5,606 5,056 4,562 4,118 3,720 3,361 3,039 2,749

4.50 6,276 5,654 5,096 4,596 4,146 3,743 3,381 3,055 2,763 2,499 2,262

4.00 5,137 4,630 4,175 3,767 3,401 3,072 2,776 2,510 2,270 2,055 1,861

3.50 4,204 3,792 3,421 3,088 2,789 2,521 2,279 2,062 1,866 1,690 1,531

3.00 3,442 3,105 2,803 2,532 2,288 2,069 1,871 1,694 1,534 1,390 1,259

2.50 2,817 2,543 2,297 2,076 1,877 1,698 1,537 1,392 1,261 1,143 1,036

2.00 2,306 2,083 1,883 1,702 1,540 1,394 1,262 1,143 1,036 940 853

1.50 1,888 1,706 1,543 1,396 1,263 1,144 1,036 939 852 773 701

1.00 1,546 1,398 1,264 1,144 1,036 939 851 772 700 635 577

0.50 1,266 1,145 1,036 938 850 770 699 634 575 523 475

0.00 1,036 938 849 769 697 632 574 521 473 430 391

20 y

ear i

nfla

tion

expe

ctat

ions

18

AT L A N T IC H O U S E

Real rate scenarios - higher inflation with managed yield is very bullish.

Source Atlantic House gold price scenarios for 20 year breakeven and treasury yield

20 year bond yield

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

5.00 7,669 6,905 6,220 5,606 5,056 4,562 4,118 3,720 3,361 3,039 2,749

4.50 6,276 5,654 5,096 4,596 4,146 3,743 3,381 3,055 2,763 2,499 2,262

4.00 5,137 4,630 4,175 3,767 3,401 3,072 2,776 2,510 2,270 2,055 1,861

3.50 4,204 3,792 3,421 3,088 2,789 2,521 2,279 2,062 1,866 1,690 1,531

3.00 3,442 3,105 2,803 2,532 2,288 2,069 1,871 1,694 1,534 1,390 1,259

2.50 2,817 2,543 2,297 2,076 1,877 1,698 1,537 1,392 1,261 1,143 1,036

2.00 2,306 2,083 1,883 1,702 1,540 1,394 1,262 1,143 1,036 940 853

1.50 1,888 1,706 1,543 1,396 1,263 1,144 1,036 939 852 773 701

1.00 1,546 1,398 1,264 1,144 1,036 939 851 772 700 635 577

0.50 1,266 1,145 1,036 938 850 770 699 634 575 523 475

0.00 1,036 938 849 769 697 632 574 521 473 430 391

20 y

ear i

nfla

tion

expe

ctat

ions

19

AT L A N T IC H O U S E

Forecast - inflation expectations to 4% and capped long bond yield at 1.5%.

Source Atlantic House gold price scenarios for 20 year breakeven and treasury yield

20 year bond yield

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

5.00 7,669 6,905 6,220 5,606 5,056 4,562 4,118 3,720 3,361 3,039 2,749

4.50 6,276 5,654 5,096 4,596 4,146 3,743 3,381 3,055 2,763 2,499 2,262

4.00 5,137 4,630 4,175 3,767 3,401 3,072 2,776 2,510 2,270 2,055 1,861

3.50 4,204 3,792 3,421 3,088 2,789 2,521 2,279 2,062 1,866 1,690 1,531

3.00 3,442 3,105 2,803 2,532 2,288 2,069 1,871 1,694 1,534 1,390 1,259

2.50 2,817 2,543 2,297 2,076 1,877 1,698 1,537 1,392 1,261 1,143 1,036

2.00 2,306 2,083 1,883 1,702 1,540 1,394 1,262 1,143 1,036 940 853

1.50 1,888 1,706 1,543 1,396 1,263 1,144 1,036 939 852 773 701

1.00 1,546 1,398 1,264 1,144 1,036 939 851 772 700 635 577

0.50 1,266 1,145 1,036 938 850 770 699 634 575 523 475

0.00 1,036 938 849 769 697 632 574 521 473 430 391

20 y

ear i

nfla

tion

expe

ctat

ions

20

A D D IN G VA LU E

2030 gold price outlook

‒ Rates move causes real rates to fall from -0.75% to -2.5% driven by rising inflation expectations to 4%

and long bond yield capped at 1.5%

‒ Fair value (today) rises to $3,767

‒ Add actual or realized inflation at 4% for 10 years

‒ Impact 1.5x

‒ Premium to fair value rises to 50%, currently 17%

‒ Impact 1.3x

‒ Rates move x realized inflation x premium = $7,345 by 2030

21

A D D IN G VA LU E

Summary

‒ Moves in the gold price are rational.

‒ 2000 to 2011 was driven by real rates and swing from discount to premium.

‒ 2018 to 2030 bull market will be driven by higher inflation.

‒ Ignore conspiracy theories in the gold market, they are not true.

Background

22

FOR PROFESSIONAL INVESTORS ONLY

Atlantic House Investments is a trading name of Atlantic House Fund Management LLP. This document is issued by Atlantic House Fund Management LLP and does not constitute or form part of any offer or invitation to buy or sell shares. It should be read in conjunction with the Fund’s Prospectus, key investor information document (“KIID”) or offering memorandum. Atlantic House Fund Management LLP is authorised and regulated by the Financial Conduct Authority 586302, registered in England and Wales, Registered Office: One Eleven Edmund Street, Birmingham, B3 2HJ.

The price of shares and income from them can go down as well as up and past performance is not a guide to future performance. Investors may not get back the full amount originally invested. A comprehensive list of risk factors is detailed in the Prospectus and KIID and an investment should not be contemplated until the risks are fully considered. The Prospectus and KIID can be viewed at www.atlantichousefm.com and at www.geminicapital.ie

The contents of this document are based upon sources of information believed to be reliable. Atlantic House Fund Management LLP has taken reasonable care to ensure the information stated is accurate. However, Atlantic House Fund Management LLP make no representation, guarantee or warranty that it is wholly accurate and complete.

The Atlantic House Defined Returns Fund is a sub-fund of GemCap Investment Funds (Ireland) plc, an umbrella type open-ended investment company with variable capital, incorporated on 1 June 2010 with limited liability under the laws of Ireland with segregated liability between sub-funds.

The Company is authorised in Ireland by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011) (the “UCITS Regulations”), as amended. Gemini Capital Management (Ireland) Limited, trading as GemCap, is a limited liability company registered under the registered number 579677 under Irish law pursuant to the Companies Act 2014 which is regulated by the Central Bank of Ireland. Its principal office is at Suite 25, 63 Carysfort Avenue, Blackrock, Co. Dublin and its registered office is at 1 WML, Windmill Lane, Dublin 2, D02 F206.GemCap acts as both management company and global distributor to GemCap Investment Funds (Ireland) plc .Gemini Investment Management Ltd provides distribution oversight services to GemCap acting as global distributor and is responsible for the oversight of all distribution arrangements for the sub-fund.

IMPORTANT INFORMATION

A P R I L 2 0 2 0

ContactT: ( +44 ) 20 7043 0100

E: distribution@atlantichousefm.com

www.atlantichousefm.com