ATRAM bets on gold equities as Filipinos seek diversification

Insider Spotlight

• Gold equities offer an alternative to owning physical gold
• Investors gain exposure to global gold-related companies
• Higher potential returns come with higher volatility
  
  
  
  

ATRAM Trust Corp. is betting that demand for portfolio diversification will create an opening for gold-related equities among Filipino investors navigating inflation, volatile markets and economic uncertainty.

The investment manager launched the ATRAM Global Gold Equity Feeder Fund, a high-risk equity Unit Investment Trust Fund that invests substantially all its assets in a diversified global portfolio of companies involved in gold mining and related businesses.

Why it matters

Investors aren't buying gold itself. Instead, their money is invested in businesses that explore, develop, mine and finance precious metals around the world.

That means returns can come from changes in the value of these companies. When gold prices rise faster than miners' production costs, their profit margins can expand, potentially lifting their share prices and the value of funds that invest in them.

The trade-off is higher volatility.

The bigger picture

Gold has historically been regarded as a store of value during periods of inflation, market stress and currency volatility. Gold-related companies, meanwhile, can behave differently from broader global markets, potentially adding another source of diversification to a portfolio, according to a company release.

But investing in miners introduces risks beyond movements in the gold price. These are operating businesses whose performance can also be affected by production costs and other company-specific factors.

What they're saying

 "Many investors think of gold primarily as a physical asset, but there is also opportunity in the businesses that support the industry," ATRAM head of products Miguel Liboro said.

"With this Fund, investors can participate in the growth potential of companies involved across the gold value chain while gaining exposure to an asset class that has long played a role in diversified portfolios."

Zoom in

 ATRAM is positioning the fund for investors with an aggressive risk profile and a long-term investment horizon, rather than as a substitute for conservative investments.

The fund is available in Philippine pesos and US dollars, giving local investors access to global gold-related equities without directly buying, transporting or storing physical gold. — Princess Daisy C. Ominga | Ed: Corrie S. Narisma