Investment Rationale
- Role of each Metals
Gold – Strategic hedge, crisis protection, low correlation to equities.
Silver – Cyclical, high industrial demand (solar, electronics), potential for outperformance in manufacturing/reflation phases. - Diversification: Gold stabilizes while silver amplifies, offering multi-regime risk balance.
Whats driving the price up?
- Gold: Central-bank buying, Fed rate-cut cycles, dollar weakness, geopolitical risk.
- Silver: Rising industrial/solar PV demand, persistent supply deficits, attractive gold–silver ratio (91 currently vs long-term 70).
Whats the current problem with reinvesting?
- Timing either metal is hard: long “flat” phases for gold, high volatility/fat tails for silver.
- Frequent rebalancing triggers short-term capital gains tax and erodes compounding.
Gold & Silver basket benefits
- Professional Allocation: Upto 25% allocation in silver with tactical tilts using momentum, ratio signals, and macro factors.
- Tax Efficiency: Internal rebalancing avoids repeated capital-gains taxation.
- All-Weather Exposure: Reduces regret risk and offers a single vehicle for precious-metal diversification.
Historical Performance
- 15-yr CAGR: Gold 11.8%, Silver 9.5%, 50:50 blend 12.1%.
- 3-yr CAGR: Gold 25.3%, Silver 24.1%, blend 24.1%.
- Lower correlation with equities and debt enhances portfolio diversification.
(*Past performance is not indicative of future results.)
Bottom Line
The Gold & Silver basket offers a convenient, tax-efficient way to gain balanced exposure to both strategic (gold) and cyclical (silver) precious metals, aiming to capture diversification benefits while mitigating timing and tax-related risks.