Gold needs no introduction when it comes to investable assets. The precious metal has maintained its stature throughout the ages as a reliable store of value. Even today, the shiny asset remains exceptionally popular, with the World Gold Council reporting that central banks bought a record high of 374 tons this year, further entrenching its status quo. There is no doubt that gold is here to stay for the long-term and arguably has more historical data to supplement this view than any other modern portfolio asset.
Apart from the use cases in jewelry and industry, the commodity is used by many as a long term store of value and hedge against both the monetary system and its inevitable inflation. Although there are many advocates for owning physical gold, there are proven inefficiencies with this approach from both a pricing and custody perspective. Therefore, a large number of investors have turned to low-cost investment vehicles to professionally manage and safely store their assets.
With the advent of blockchain technology facilitating the creation of a secure digital version of gold, a plethora of new market opportunities have opened up for the precious metal. The most popular gold-backed tokens represent one fine troy ounce (t oz) of a 400 oz London Good Delivery gold bar, with the gold safely stored in the world’s most secure vaults. This allows for an incredibly safe and cost-effective way to gain direct exposure to gold. These digital gold-backed tokens are redeemable 1:1 for the underlying and therefore track the price of gold. These tokens behave much like futures contracts, although they are far more efficient as one does not need to re-enter the contract over every few months and therefore experience potential negative roll-yield.
Invictus Capital is an asset management company that has merged the new age with the old and created the Invictus Gold Plus Fund (IGP). The team at Invictus Capital has revolutionized the fund management process, offering investors a range of unique, tokenized fund offerings with no investment minimums and 24/7 subscription and redemption capabilities.
The team has a solid track record over the years with award-winning fund offerings. The IGP Fund is the latest addition by Invictus Capital and not only aims to give investors a simple, cost-effective way to gain exposure to gold but has an objective to outperform gold through various investment strategies it has employed through years of experience in the digital asset markets. IGP, therefore, allows the investor to have full gold price exposure while earning a yield on gold over and above the spot price.
Tokenized funds work much the same way as your traditional mutual funds whereby dealing occurs on a daily basis at a net asset value struck by the team. Investors are therefore able to redeem their holdings for cash, or USD-backed tokens, at any time.
Gold has a special place in any investment portfolio for investors seeking to build a well-diversified portfolio of assets. Given the current global economic environment of low or negative real interest rates, inflated money supply and increased demand for gold by investors aiming to hedge their portfolios, gold is well-positioned by historical standards to achieve outsized returns.