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Superannuation: Why Investing In Gold Makes Sense

Holding precious metals is a simple and effective way to truly diversify your portfolio, helping you to build wealth over the years, whilst minimising risk along the way. Many investors are concerned that their superannuation portfolios, many of which are highly concentrated in the share and fixed-income markets, are not sufficiently diverse, or safe. This is especially the case in the aftermath of the Global Financial Crisis (GFC), with debt levels continuing to rise, central banks printing money, interest rates at record lows and negative bond yields.  


You can invest in Gold using your Superannuation

ABC Bullion is the precious metal investment education authority, and has a particular focus on the potential role of gold within superannuation funds. ABC Bullion assists its clients use their superannuation money to invest in physical precious metals in three ways:

1. Self-Managed Superannuation Fund Whitepaper
The annual ABC Bullion SMSF Trustee and Physical Bullion report is Australia’s most detailed source of knowledge for SMSF trustees looking to invest in precious metals. It covers the major reasons to invest in physical gold and silver, the key factors to consider, as well as case studies and FAQs. Read more.

2. Self-Managed Superannuation and Precious Metals Report
This report is for clients who are interested in setting up a SMSF and investing in physical gold. Read more.

3. Superannuation Gold Investment Guide
For those without their own SMSF, you can invest your superannuation into gold via brightday and Cor Capital, an Australian Registered Managed Investment Scheme with a strategic and significant allocation to physical gold. Download our Superannuation Guide to learn how.


Physical Gold and Superannuation: The Last 15 years

There are a key number of reasons why investors would want to hold some of their investment portfolio in precious metal. These reasons include the fact that:

  • Gold prices tend to rise most when ‘real’ interest rates (which account for inflation) are low, as they are all around the world today
  • Gold is uncorrelated to the share market, especially when the share market falls. This helps to balance a portfolio
  • Gold is a natural currency hedge for an Australian investor
  • Gold is highly liquid and has zero counter-party risk
  • Gold is a proven hedge against inflation as well as geopolitical and economic uncertainty

This is clear in the following charts, which plots the value of AUD $100 invested in physical gold in AUD, versus the value of AUD $100 invested in a retail superannuation fund, from the end of 1999 until the end of 2015.

The outperformance of gold versus traditional superannuation funds has continued in Q1 2016, with the gold price rising over 10%, unlike superannuation funds, which have struggled since the start of the year with increased share market volatility.

Source: Chant West, Cor Capital, IRESS, GF Data, Gold returns are gross of fees, super returns are net of investment fees but before admin and adviser commissions