Precious metals specialist AuAg Funds continues to celebrate milestone after milestone. Just a month after its alternative 60/40 fund, AuAg Precious Green, marked its five-year anniversary, the boutique has reached SEK 4 billion in assets under management across its four funds. This achievement reflects both strong fund performance, with all funds reaching new highs, and steady net inflows from investors.
AuAg Funds offers a range of precious metals-focused equity funds, including AuAg Silver Bullet, which invests in mining companies and securities influenced by silver market developments, AuAg Gold Rush, focused on gold mining companies and related securities, and AuAg Essential Metals, which provides exposure to critical raw materials essential for modern technologies.
The fourth fund, AuAg Precious Green, is a more alternative vehicle, described by founder and portfolio manager Eric Strand as a “modern remake of the classic 60/40 portfolio.” The fund replaces the classic portfolio’s broad exposure to stocks with investments in green-tech companies, with investors gaining exposure to the electrification megatrend. The remaining 40 percent is allocated to precious metals – mainly gold – for robust portfolio protection.
“We are a little proud launching the fund concept and the ‘remake’ of the classic 60/40, even if the focus on electrification (60 percent equity, with four strategies) has had both strong and weak periods during the five years.”
The long-only, commodity-focused funds AuAg Silver Bullet and AuAg Gold Rush “are at the top of all fund rankings across categories this year, delivering stellar performance,” according to Strand, with U.S. dollar-denominated returns reaching triple digits. Compared to these “rocket returns,” the more alternative AuAg Precious Green “has looked a little pale,” but it is now regaining momentum. A member of the NHX Equity Long-Only, AuAg Precious Green has advanced 20 percent year-to-date through the end of September, including an 11 percent gain during the month of September alone.
AuAg Precious Green marked its five-year anniversary this September, having delivered an annualized return of nearly 12 percent since inception. “With little noise, since its launch just over five years ago, it has also performed much better than other popular Swedish alternative funds used by wealth advisors for their clients,” notes Strand. At the same time, the fund has also surpassed the performance of the broad Swedish stock market. “With its low correlation to traditional equities, it fits well in virtually any portfolio, enhancing the overall risk/return profile,” he emphasizes.
Looking back at the fund’s journey since its inception five years ago, Strand says, “We are a little proud launching the fund concept and the ‘remake’ of the classic 60/40, even if the focus on electrification (60 percent equity, with four strategies) has had both strong and weak periods during the five years.” He believes that the sector has turned and offers an attractive entry point since the spring of this year. “Gold or precious metals (40 percent), instead of bonds, has been a home run since the beginning. Period,” he concludes. The fact that Morgan Stanley now suggests a 60/20/20 allocation as ‘the new 60/40’ brings a smile to Strand and his team, a nod to the approach they pioneered five years ago.
