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Invictus Gold Plus Fund (IGP)For centuries, gold has been considered a safe haven investment, providing a hedge against inflation.
Invictus Capital presents a new, open ended fund that tracks the underlying gold priceand aims to earn an additional yield on your gold investment.
Gold performs well during recessions and stock market downturns
Gold retains its purchasing power
Gold is uncorrelated to traditional assets
What makes gold a great long term investment?Reason 1 (A): Gold performs well during recessions
GOLD PRICES DURING FINANCIAL CRISES
$2,000
$1,600
$1,200
$800
$400
$01972 1980 19841976 1988 1992 1996 2004 2008 20162000 2012
Given the current global economic environment of low or negative real interest rates and inflated money supply, gold is poised to outperform most asset classes over the coming years.
Gold historically performed well during recessions and financial crises as it has traditionally been seen as a store of wealth and a protection in times of excessive money printing.
For illustration, during the 2008 financial crisis, the price of gold roughly doubled. Subsequently, in the wake of the threat of further bank defaults and the Eurozone crisis, the price of gold hit an all time high.
Gold prices (London P.M. Fix, in $) from January 1972 to December 2018
Source: SunshineProfits
What makes gold a great long term investment?Reason 1 (B): Gold is negatively correlated to stock markets, providing a hedge in downturns
Gold has risen in most historical stock market crashes and the recent stock market crash suggests an upcoming rally.
Gold tends to be resilient during stock market crashes since the two are negatively correlated during recessions. Stocks benefit from economic growth and stability whereas gold advances during economic distress and crisis.
With the COVID-19 current crisis in mind, this makes investing in gold attractive as a portfolio protection tool.
Source: World Gold Council
What makes gold a great long term investment?Reason 2: Gold retains its purchasing power
A significant driver of the price of gold is the level of US interest rates as investors move into fixed-income investments that yield a higher return. This is because, when interest rates are low and the dollar depreciates in value, demand increases for gold.
Gold outperforms in low interest environments
Long-term inflation hedge that has proved to maintain its purchasing power relative to cash. 5 years from 1929 crash, gold’s investment purchasing power rose 17 times; and 15 times after the 1973-4 crash. So far in gold’s current re-emergence, with the economic situation looking hostile, gold still looks nearer to the bottom than it does to the top.
Gold retains its value in the long term
0.0%
0.2%
-0.2%
-0.4%
Long Term Low(<0%)
Moderate(0% - 2.5%)
High(>2.5%)
0.4%
0.6%
0.8%
1.0%
1.2%
Real Rate Environment
Aver
age
Mon
thly
Ret
urn
0
1900 1990
20
40
60
80
100
120
1910 19601920 1930 1940 1950 1970 1980 2000 2010 2018
Gold Dollar Yen Euro
Source: Gold.com Source: Coin.fyi
What makes gold a great long term investment?Reason 3: Gold is uncorrelated to traditional assets
Gold, influenced by its history as a currency, has often taken the role as an inflation hedge and a portfolio stabilizer during turbulent financial markets.
Gold offers diversification benefits due to the uncorrelated nature and is ideal for lessening exposure to market fluctuations.
It offers a combination of long-term returns and a low correlation to other asset classes which make it a safe-haven asset during times of market turmoil.
-0.20
Bonds
Equity Market Neutral
Global Macro
Relative Value
Event Driven
Distressed
Gold
Private Real Estate
Equity Long / Short
Global Macro
Stocks
Commodities
5 20
0
0.2
0.4
0.6
0.8
1.0
1.2
10 15 25 30
Less Volatile
Mor
e Di
vers
ifyin
g - L
ess
Dive
rsify
ing
More Volatile
Relationship between Asset Classes andtheir Diversification Potential
Source: Bloomberg.com
Historical performanceGold performs exceptionally well over a long time horizon
0%
2%
-2%
-4%
-6%Since 1971 20 Year 10 Year
4%
6%
8%
10%
12%
14%
US Cash US Bond Agg. US stocks EAFE stocks
EM stocks Commodities GoldSince 1971, the price of gold has averaged returns in excess of 10% per annum, comparable with US stock returns over the same period.
This healthy source of long-term returns, coupled with its negative correlation to global equity markets, results in an asset that boosts the risk-adjusted returns of most investment portfolios.
Source: Gold.org (Data between January 1971 and 30 June 2018)
Annualized Gold Returns over 3 long-term time horizons
Fund Goal and Strategy
This is achieved in three ways:
Taking advantage of arbitrage opportunities between spot markets to earn an additional yield.
Generate an additional yield on your investment by outperforming our benchmark through margin lending activities on exchanges such as Bitfinex. During times of high volatility, these rates have spiked as high as 140% in March 2020 but have historically been double digits.
A small weighting of the fund is allocated to IML (USD-based lending fund) which has historical returns of 10%+ p.a for liquidity purposes.
The Fund's goal is to outperform the SPDR Gold Shares (GLD) ETF as a long-term benchmark.
Invictus Gold Plus Overview
Features
RISK / RETURN PROFILE
High
Risk
Pote
ntia
l Ret
urn
Higher risk requires a longer investment horizon
Low Medium
Investment optionsTUSD, USDT, banktransfers and creditcards for now.
24/7 liquidity through fund allocation to IML (TUSD)
Fees
Management Fee = 0.75% pa
Performance Fee = 20% over and above Bench-mark Returns
Fund structure
Open-ended fund
Invictus has partnered with both Paxos and Tether in supplying gold-backed tokens as the primary source of gold exposure. Asset Allocation: Fund will predominantly be held in gold-backed tokens with a slight allocation to the IML fund for liquidity purposes.
Risk and return assumptions
Return:The fund will aim to outperform the SPDR Gold Shares (GLD) ETF as a benchmark.
Investor Profile: Medium to long term suitability
Moderate/High levels of volatility
