Incrementum Sets Up Fund Investing in Bullion Mining Stocks

Feb 24, 2014 7:08 pm ET

Feb. 24 (Bloomberg) -- Incrementum AG, a partner-owned asset manager in Liechtenstein, introduced a fund that will invest in gold and silver mining equities based on the outlook for inflation and deflation.

The Austrian Economics Golden Opportunities Fund started in the principality last week and will also invest in energy equities and commodity indices, said Ronald Stoeferle, fund manager and managing partner at Incrementum, based in the capital, Vaduz. The size of the fund, which will bet on rising and falling assets, should be about 10 million euros ($13.7 million) within three months, he said.

The 30-member Philadelphia Stock Exchange Gold and Silver Index rebounded 22 percent since the end of December, after plunging 49 percent last year. Gold and silver prices slid the most since 1981 in 2013 as the Federal Reserve signaled plans to slow bond purchases, while gains in U.S. consumer prices remained in check.

“Our long-term bias is clearly inflationary, but we want to be prepared for deflationary periods as well,” Stoeferle said today by phone. “Inflation is very much of a contrarian view at the moment. Mining stocks are definitely not a buy and hold sector. You have to actively time them.”

The U.S. central bank cut its bond-buying program to $65 billion a month and the Bank of Japan left unchanged this month a pledge to expand the monetary base by 60 trillion yen ($585 billion) to 70 trillion yen per year.

Incrementum’s UCITS-compliant fund is based on the Austrian School of Economics, a philosophy that follows actions of individuals, and will be managed also by Mark Valek, Stoeferle said. The company will use its own inflation indicator to guide investment, which gave a signal for rising inflation last week for the first time in more than 19 months, he said.

Incrementum’s partners have worked at banks including UBS AG, Societe Generale SA and Erste Group.

--Editors: John Deane, Sharon Lindores