The Gold Market Pioneer - Aureus Fund · 2017. 11. 8. · the European sovereign debt crisis in recent years, the gold price increased alongside increasing credit risk, when the bubbles

The Gold Market Pioneer

Aureus Fund (Ireland) plc.

The First Gold Fund in the World

Established 2002

Aureus Fund | The Gold Market Pioneer

Aureus Fund (Ireland) plc. | © 2016 |

Long-term experience in the Gold market

The world’s first gold focused fund

2

Aureus Fund

ZKB Gold ETF

Lyxor Gold

Bullion Sec.

ETS Securities

Xetra Gold

Hansagold

Promont Golden

Julius Bär

Solit Gold&Silver

Credit Suisse

SPDR Gold Shares

RBS physical Gold

Lion Global Gold Fund

E-Fund Gold

iShares Gold

Euwax Gold

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



The Aureus Fund at a glance

3

No credit risk

Diversified portfolio of gold, silver, platinum and palladium, with an up to 60% share of gold

Precious metals are safely stored with Credit Suisse in Zurich, Switzerland

Strong performance versus other precious metals funds

Competitive fee structure versus other precious metals funds





5

The bullish case for Gold

•

The benefits of white precious metals

Aureus Fund (Ireland) plc. Best of both worlds: Portfolio insurance and return

Geopolitical hedge

Storage of wealth in THE safe-haven investment



Global QE reaches limits and has

led to increased financial

instability.

Negative yielding and QE end up in

a depreciation war…

A1

Source:

Bloomberg, LBBW AM

Where Gold is the only storage of wealth

6

Only the Yen has held its value since

the global financial crisis, but is

expected to depreciate in the future

due to a shift to fiscal stimulus and

wage growth.

50

70

90

110

130

150

170

190

210

230

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gold/USD EUR/USD GBP/USD

AUD/USD JPY/USD



-2

0

2

4

6

8

10

12

2011 2012 2013 2014 2015 2016

Dividend Yield of European Equities European Corporate Bond Yield

German Government Bond Yield European High-Yield Bond Yield

… and monetary policy has led to

mispricing of risks

7

A1

Return-free risk instead of risk-free return

Significant decrease in

yield results in hunt for

yield asset bubbles?

Source:

Thompson Reuthers Datastream, LBBW-AM

Yields of the last five years as of 24.10.2016



QE and negative interest rates

have failed to stimulate economies

-10

-5

0

5

10

15

20

GDP growth China

GDP growth USA

GDP growth EU

GDP growth Japan



Fiscal policy is due to jump in

Continuously low interest

rates, mispricing of assets, risk

of asset bubbles as a result of

hunt for yield

Gold as an insurance against risks of inflation and asset price bubbles!

More expansive fiscal policy in response to missing economic

stimulation can result in

If fiscal policy is successful

Inflation, potentially even

hyper inflation

If fiscal policy fails

1 2



If fiscal spending results in high inflation, the

gold price is likely to rise

A1

0

2

4

6

8

10

12

14

16

050

100150200250300350400450

Gold in USD (lhs)

US CPI (rhs)

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

2007 2008 2009 2010 2011 2012 2013 2014 2015

billio

n U

SD

World public debt

Above-ground gold stock

Source:

Economist, GFMS, WGC, LBBW AM, Bloomberg

As of YE 2015

+90%

+13%

Gold cannot be mined

as fast as money can be

printed.

Gold is a scarce

resource, serving as

inflation hedge.

1



If fiscal spending fails and asset bubbles burst,

gold would be appreciated as storage of wealth

Source:

Bloomberg, LBBW AM

A1

2

…as seen at the end of

the housing bubble and

the European sovereign

debt crisis in recent

years, the gold price

increased alongside

increasing credit risk,

when the bubbles burst

(i.e. the stock market

collapsed)

Source:

Bloomberg, LBBW AM

30

80

130

180

230

1700

2200

2700

3200

3700

4200

4700

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Euro Stoxx 50 (lhs) ITRAXX Europe 10 Year (rhs)

30

80

130

180

230

550

750

950

1150

1350

1550

1750

1950

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gold in USD (lhs) ITRAXX Europe 10 Year (rhs)



Gold is furthermore appreciated as storage

of wealth in times of geopolitical crises

A2

200

400

800

1600

1979 1984 1989 1994 1999 2004 2009 2014

Gold in USD

Arab Spring

2. Gulf War Irak War

1. Gulf War

Soviet-

Afganistan

War

Source:

Bloomberg, LBBW AM



Gold is THE safe haven in times

of uncertainty!

13

The known unknowns!

…. then there are still the

unknown unknowns !

Unce

rtain

ty

High

Low

Decreasing Performance of Gold Increasing

Source:

Bloomberg, LBBW AM

A2

Brexit

Path

Uncertainty

US

President

Trump

Loss of

confidence

in the

monetary

system

Rebuilding

confidence

in the

system

Central

Bank QE

Programs

Collapse of

banking

system in

Italy

Continuing

Fed rate

hikes




14



• Benefits of a diversified precious metals portfolio compared to a Gold-only investment

• Diversification adds performance




Silver

15

B1

Beta play on Gold

Source: Bloomberg, LBBW AM

100

300

500

700

900

1100

1300

1500

1700

1900

2100

2300

2500

0

5

10

15

20

25

30

35

40

45

50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Silver in USD (lhs) Gold in USD (rhs)



0

50

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015e2016e

Automobile Electronics Chemistry

Dentistry Jewellery Investment

Other Supply

Source: GFMS, Johnson Matthey plc.,

LBBW Research

0

50

100

150

200

250

300

350

2003 2006 2009 2012 2015e

Automobile Chemistry

Other Jewellery

Investment Supply

16

Platinum Palladium

Platinum

~13%

Palladium

~40%

B1

Platinum & Palladium: Geographically concentrated mine

production can’t match demand

Platinum

~77%

Palladium

~38%

de

ma

nd in

to

nn

s d

em

an

d in

ton

ns



If you trust in Gold never forget

the white precious metals

17

B2

*First publication of the palladium-fixings on Bloomberg

The composition of the diversified basket corresponds to the holdings of the Aureus Fund


Performance since March 1992*

In times of an

increasing Gold price,

the white precious

metals tend to

outperform and

provide benefit to a

diversified

precious metals

portfolio like the

Aureus Fund! 0

100

200

300

400

500

600

700

800

900

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Gold in USD diversified precious metals basket (monthly rebased)




18




• Means to decrease portfolio risks due to diversification effects based on

low correlation between asset classes like equities and the Aureus Fund

• Outperformance versus peers

• Absence of credit risks in contrast to ETF products



Diversified precious metals portfolio

as an investment philosophy

Aureus Fund (Ireland) plc. was established in 2002 in Ireland as an open-ended

investment company with variable capital (Irish Retail Fund).

The Aureus Fund is now an Alternative Investment Fund (AIF), investing in 4

physical precious metals:

Gold 59,5%

Silver 13,5%

Platinum 13,5%

Palladium 13,5%

19

C1

59,5%

13,5%

13,5%

13,5%

Gold Silber Platin Palladium



0

50

100

150

200

250

300

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Euro Stoxx 50 (lhs)

Aureus Fund (rhs)

Aureus Fund shows low

correlation with equities*

20

C1

* Since 2007, no significant mining stocks holdings.

-1

-0,5

0

0,5

1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Correlation

ave. Correlation

Average correlation below zero!

*Since 2007, Aureus has

had no significant holdings

in mining companies

Source:

Bloomberg, LBBW AM



1500

2000

2500

3000

3500

4000

4500

5000

-7

-6

-5

-4

-3

-2

-1

0

1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Volatility reduction in % (lhs) Euro Stoxx 50

21

C1

Adding the Aureus Fund can reduce a

portfolio’s volatility A 10% share in Aureus reduces an equity portfolio’s

volatility significantly, esp. in declining equity markets




If you want a precious metals fund,

Aureus is the one to choose

22


C2

Outperformance of peers due to allocation adjustments

(over-/ underweighting) in reaction to market conditions

70

80

90

100

110

120

130

140

150

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17

AUREUS FUND SAFE PORT PRECIOUS METAL 95E ETFS PHYSICAL PM BASKET

HANSAGOLD-EUR OFI PRECIOUS METALS-R



As per Prospectus

The repurchase (and subscription) per Share is based on the Net Asset Value per Share

calulated at the Valuation Point for the relevant Dealing Day.

No spread, subscription and repurchase daily on NAV.

23

C3


ETCs

Watch the spread

Metal Securities issued or redeemed by Authorised Participants, subject to conditions.

Security Holder

Authorised

Participants

Metals

Securities

Authorised

Participants

Agreements Market-making

Issuer


Aureus Fund (Ireland) plc. | © 2016 | 24

C3

Aureus Fund (Ireland) plc. Certificates (ETC)

Funds vs. Certificates

Aureus Fund ETC

Insolvency No issuer default risk Issuer default risk, as long as

there is no ring fencing

Legal structure Open-ended alternative

investment fund

Exchange traded commodity

(ETC) – Index Certificate

Domicile Ireland Jersey

Active Management Yes Yes

Physically allocated

metals

Yes, Zurich Yes, London



Fund investments are backed by physical precious metals stored

with Credit Suisse in Zurich, Switzerland.

Unlike peers, precious metals are not lent to third parties.

The physical holdings are stored in so called segregated metal

depots in London Good Delivery Bars (standard bars, c. 12.5 kg).

25

C3

Metals are securely stored in

Switzerland…



The vault visit takes place annually by Board Members

of the Aureus Fund.

All bars are counted and randomly selected bars will be

weighted by Board Members.

The major institutional clients of Aureus are invited to

attend annual precious metal site visits in Zurich.

26

C3

… and a vault visit is held annually



Launched in Ireland in 2002

Both independent and long experienced Irish Board

Members have been working on the Board from the very

beginning

Irish Administrator, Custodian and Trustee

A & L Goodbody as the Irish legal advisor

PwC as the Irish Auditor

27

C3

Ciste Déanta in Éirinn


Aureus Fund (Ireland) plc. | © 2016 | 28

C3

Aureus Fund ETC Mining Fund

Spread No spread Spread No spread

Redemption Daily at NAV // Governed by Regulator &

Prospectus

Secondary market / Broker Daily at NAV // Governed by Regulator &

Prospectus

Insolvency No issuer default risk Issuer default risk No issuer default risk

Legal structure Open-ended fund Exchange traded

commodity (ETC)

Open-ended fund

Domicile Ireland Jersey Luxembourg

Physically allocated

metals

Yes, Zurich Yes, London No

Physical precious metals Mining

At a glance



Fund data

Aureus Fund

29

• IE0031772803 ISIN

• AUREUSF ID equity Bloomberg Ticker

• Physical precious metals (at least 95%) Investment Policy

• Euro Fund currency

• 0.70% Management Fee

• 1.15% TER

• €260m Fund Volume (as of 31.10.2016)

• Gold, Silver, Platinum, Palladium: 59,5%/13,5%/13,5%/13,5%

Reference

• 18.09.2002 Established

• LBBW Asset Management Investmentgesellschaft mbH Fund Manager

• Tresides Asset Management GmbH Advisor

• State Street International (Ireland) Limited Custodian

• Credit Suisse AG, Zurich Sub-Custodian / Storage



Disclaimer

30

This presentation constitutes advertisement and serves to describe our services and the respective products. This document is

intended for professional investors only. The information contained in this document does neither constitute any investment

advice nor advice on the buying or selling of said products, it is merely a brief summary of key aspects of the funds. This

information should not be regarded as a substitute for obtaining individual advice. The information contained herein has been

carefully compiled by us and is based on generally accessible sources that we deem reliable. However, we are unable to

assume any liability for the actuality, completeness and correctness. The presentation of historical data or the illustration of

awards for the performance of the product provides no information about future performance. The performance shown above

does not take into account fees and costs that are included in the subscription and redemption of shares. All expressions of

opinion reflect the current views of our company and may be changed at any time without prior notice. The sole legally binding

basis for purchasing/selling/swapping investment shares is the latest valid sales prospectus containing the terms and

conditions, in conjunction with the most recent semi-annual and/or annual fund report. These documents are available in

English, free of charge, in electronic or print versions from our advisor or at LBBW Asset Management Investmentgesellschaft

mbH, P.O. Box 10 03 51, 70003 Stuttgart, Germany, E-Mail: [email protected] or Investors Trust Europe, a State Street

Company, No. 78 Sir John Rogerson`s Quay, Dublin 2, Ireland, E-Mail: [email protected] or at www.aureusfund.com.

The shares of the product may only be offered for purchase, or sold, in legal systems where such an offer or sale is permitted.

The fund is not registered or licensed under applicable U.S. financial services laws and regulations and must not be sold to US

citizens. The products may not be offered, sold, transferred or transmitted, neither directly nor indirectly, in the US or in any

other jurisdiction the product is not licensed.

mailto:[email protected]





Investment Manager: LBBW Asset Management Investmentgesellschaft mbH Fritz-Elsas-Straße 31 70174 Stuttgart

In case of any questions please contact us on

the Email address:

[email protected]

Further information can also be found on our homepage:

www.aureusfund.com





Annex

History of the open EU-AIF Aureus Fund

(Ireland) plc.

The Order process

The Investment Limits


History of the open-

ended EU-AIF

In order to comply with EU Directive 2011/61/EU,

the Aureus Fund (Ireland) plc. applied for a Retail

Investor Alternative Investment Fund (RAIF) licence

in Ireland in July 2014.

In Germany, the Aureus Fund (Ireland) plc. can be

distributed to professional (institutional) clients only.

In anticipation of the diversification requirements of

the new German Investment Tax Act of 2014, the

ratio of Silver, Platinum and Palladium was

increased in December 2013.

Since December 2013, the Aureus Fund (Ireland)

plc. invests predominantly (more than 51%) in

physical allocated Gold. In practice, management

intends to hold allocated Gold close to the

maximum level of 60% of NAV.


The Aureus Fund (Ireland) plc. Intends to invest at

least 95% in allocated precious metals and is neither

a bond nor a ETC/ETN.


The order process

NAV Order:

There is no active secondary market on the Irish Stock Exchange. Orders

should only be placed with the „LBBW Fund Settlement Department“ in

Stuttgart as a „Fund NAV trade“.

Trading Details are only valid for NAV Orders via LBBW Kommissionshandel.

Different rules might apply for order routed via third parties.

Cut-off: 2 pm (German Time)

Value = Trading Day +2 Business Days.[1]

NAV will be published one business day after the trading day.

Example:

Order on: Wednesday (cut-off 2 pm German time)

Valuation of precious metals at specific pm-fixing [2]:

Wednesday (4 pm German time)

NAV published: Thursday

Value day: Friday

Please note: The Aureus Fund (Ireland) plc. has

deposited a Global Certificate with Clearstream

Banking and can easily be settled within the

Clearstream Banking System.

Order placement via LBBW / Network

Management and Operations

Services:

FAX-Number: +49 711-127-75396

Phone Trading Investment Funds:

+49 711-127-78908

ISIN: IE0031772803 [1] NAV orders for settlement in Clearstream can only be placed with LBBW. Please contact us

for non-Clearstream trades on the Fund’s register.

[2] Business days are days on which retail banks are open for business in Dublin & Stuttgart

(see Definition Prospectus), subject to change.

[3] Gold: 4 pm German time; other assets might be valued at different times.


Investment Limits

At least 95% of NAV will be held in physical

precious metals in Switzerland

Gold:

Minimum 50%

Target 59,5%

Maximum 60%

White metals:

Minimum 5%

Target 13,5%

Maximum 30%

Silver Target 13,5%

Platinum Target 13,5%

Palladium Target 13,5%

Prospectus and Internal

Documents

The Gold Market Pioneer - Aureus Fund · 2017. 11. 8. · the European sovereign debt crisis in recent years, the gold price increased alongside increasing credit risk, when the bubbles