Could you profit from gold coins?

The gold bull market may have lost some of its sheen over the summer but, if you're worried about anything from inflation to war, you still need to be holding it. One route we've never looked at before is holding gold coins. And one fund offers an effortless route into the coin market.

By MoneyWeek

published 17 January 2007

in Features

The gold bull-market may look to have lost some of its sheen over the summer, but if you are worried about the global economy, inflation, war or, indeed, about the bad things in the world (as we usually are at MoneyWeek) you still need to be holding it. We've looked at many ways of doing this over the last few years: buying the Merrill Lynch Gold & General Fund or shares in Gold Bullion Securities (GBS), for example. But one route we've never looked at is the buying of gold coins.

Why gold coins are a good investment for uncertain times

Peter Temple would probably say we'd missed a trick. The supply of rare gold coins is fixed, he says in the FT, making them a far less speculative investment than bullion itself. There's also an active collectors market and the portability and tangibility of gold coins makes them something you might want to have in hand in times of real uncertainty.

Still, Temple is an expert on all sorts of alternative investments and is more up to the job of choosing and buying coins than most of the rest of us. Good news, then, that there is an effort-free way into the coin market: the Arvae's Global Coins Fund (managed by Merrill Lynch), which listed on Aim last May.

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The fund trades in all sorts of precious coins and its managers have used the £6m they raised on listing to accumulate an impressive-looking hoard for the fund, says Ellen Kelleher in the FT. They have third-century gold coins struck in Attica, Macedonia, Phoenicia and Egypt, as well as a selection of royal coins dating back to the reign of Charles II, and only a few months ago acquired a rare gold double florin for £400,000 the largest sum paid for an English coin. They now intend to concentrate on Islamic and Far Eastern coins.

So should you buy in? Ian Goldhart, adviser to the fund, clearly thinks so, and MoneyWeek is minded to agree. The rarity of the gold coins that the fund is sourcing makes it a nice option for gold investors and a way not only into physical gold, but into the collectors market too.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.