Gold Rush For New Gold Coast Asset Manager
A new asset management company has been formed to establish Australasia's first open-ended, fully allocated gold backed exchange-traded fund providing an exclusive physical gold redemption feature.
- (1888PressRelease) January 13, 2011 - The Australian Midas Fund, which forecasts to have $450 million under management in its first year, will be managed by the Midas Management Group to provide a secure and convenient investment alternative for investors interested in holding physical gold bullion without the inconvenience typically associated with precious metals.
Chairman Anthony Fitzgerald says 97 percent of The Australian Midas Fund's net asset value will be held in physical good delivery bullion bars, owned by investors but stored offshore in the custody of an independent Swiss asset management group.
"Managed by Midas Management Group, The Australian Midas Fund will pioneer the Australian financial market with a product that not only offers the traditional hedging characteristics of gold but also additional protection against inflation, deflation and other manipulations associated with paper currencies and importantly the security of having the unique ability to redeem in physical gold bullion," Mr Fitzgerald says.
"By establishing a legitimate fund that actually holds gold bullion, rather than paper based transactions, our fund will capture a large percentage of a market that is seeking safe and solid returns and in turn is set to revolutionise the Australasian ETF industry.
"The Australian Midas Fund will be selling 12,000,000 transferable, redeemable preference shares in its initial offering, with subsequent offerings to Asia, Europe and America following shortly after."
While the price of gold has increased sixfold since 2001 from US$255 to US$1,435, Mr Fitzgerald says the precious metal tends to move in cycles of 12 to 20 years and should therefore continue to increase substantially in value for some time to come.
"Gold should not be measured on a daily basis but should be considered as a long-term core holding, however only one percent of investors are exposed to gold," Mr Fitzgerald says.
"While most sophisticated investors believe they manage a well-diversified portfolio, research has shown that the opposite in fact is true.
"There are number of strategies to hedge against portfolio volatility but only one has consistently proven resilient over the longer term and provided a foundation of strength and a pillar of protection, and that strategy is gold."
Mr Fitzgerald says the case for the precious metal is even stronger since the global financial crisis which has left a justifiable legacy of uncertainty and a general lack of confidence in the fiat based monetary system, namely money based solely on faith in the government issuing the money.
"A number of significant emerging economies are strategically investing heavily in gold, including China, India and Russia, in order to alleviate such uncertainty and lack of confidence and to add strength to their economies in the environment of a faltering US dollar," Mr Fitzgerald says.
"According to the World Gold Council the current global mine supply equates to 2,400 metric tons per annum whilst global demand sits at 4, 500 metric tons.
"Globally central banks have also moved to become net buyers of gold, the first time since 1988, with this growth expected to gather speed in 2011 and beyond.
"However many ETF's currently on the market don't hold the bullion they claim and have complex, misconstrued prospectus clauses and poor accessibility.
"We believe The Australian Midas Fund will be successfully adopted worldwide as investors seek to invest in a legitimate gold back fund with low costs and superior redemption options."
The key advantage of the fund is its redemption program as investors are not only allocated bullion in line with shareholdings but have the ability to redeem in cash or physical bullion at any time.
The Midas Management Group is currently in the process of finalising its listing compliance with the ASX and contract negotiations with bullion asset management groups as well as preparing a prospectus and establishing a marketing program for The Australian Midas Fund.
Mr Fitzgerald says the Midas Management Group is already working with a number of investors who have not only shown interest in the fund, but also an interest in investment opportunities in Midas Management Group itself.
"We are offering an equity stake in Midas Management Group of approximately 20 percent with a forecasted substantial return on investment in the form of dividends from as early as July 2012," Mr Fitzgerald says.
"The Midas Management Group has also identified a number of hybrid funds to bring to market in the very near future to cater for the more risk tolerant investors as well as other commodity based exchange traded funds.
The Midas Management Group intends to launch The Australian Midas Fund in March, the Asian Midas Fund in September, and the America Midas Fund and Trans-Euro Midas Fund in 2012.
For more information visit www.midasmanagementgroup.com.au.
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