This short article addresses five key questions related to superannuation and investing in gold. It is a topic of growing interest given the already vast pool of superannuation money in Australia and how important superannuation is as a financial asset for most Australians. Employees are required by law to put 9.5% of their salary into a superannuation fund every year.
Do Australian superfunds invest in gold?
Australian superfunds can and do have some gold exposure, though it is typically very minimal. June 2019 statistics from the Association of Superannuation Funds of Australia (ASFA) and the Australian Prudential Regulation Authority (APRA) suggest that only 2% of Australia’s superannuation monies are invested in ‘other’ assets, of which gold is just one.
Whilst there is no exact figure, it is likely that less than 0.1% of all Australian superannuation assets are currently invested in gold.
How has gold performed versus superannuation funds?
Since the turn of the century, the gold price has risen from under AUD 450 per ounce to more than AUD 2,000 per ounce, with an annualised return over the 20 years to end June 2019 of 8.48%. Across the same period, data from superannuation research consultancy Chant West states that the median ‘growth’ superannuation fund returned 6.8%.
Whilst gold has outperformed over this time period as a whole, there are years where superannuation funds outperformed gold. This can be seen in the following chart, which shows financial year returns from the 30 June 2000 to the 30 June 2019.
Should I invest in gold using my superannuation?
The Perth Mint cannot provide financial or formal investment advice, including advice as to how people should manage their superannuation. Like all asset classes, there are risks to investing in gold and precious metals more generally.
However, market history has demonstrated that gold in particular has a number of key attributes which make it attractive to investors, including:
• Strong long-term returns
• Historical outperformance in periods of low real interest rates
• Historical outperformance in periods of heightened equity market volatility
• High liquidity making it easy to buy and sell
• Zero credit risk
These attributes are helping drive investment demand for gold in Australia which includes Australians wishing to invest in gold via their superannuation.
Can the Perth Mint help me invest in gold using superannuation?
The Perth Mint has a range of investment solutions, from our ASX-listed product (ticker code: PMGOLD) through to our online and offline depository accounts, which many investors use to access gold for their own Self-Managed Superfunds (SMSFs).
It is best to contact your superannuation fund to discuss how gold fits into your current investment strategy and portfolio type.
Where can I find out more?
If you would like to find out more about investing in gold using superannuation, then you might like to read The Perth Mint’s report titled How precious metals can benefit SMSF trustees.
Whilst the report is targeted toward Australians with a SMSF, it contains a host of useful information about why people may wish to invest in gold using their superannuation, frequently asked questions on investing in gold using superannuation, and details on Perth Mint products.
The report can be accessed here.
You can also email Perth Mint Depository at depository@perthmint.com or contact Senior Investment Manager Jordan Eliseo at jordan.eliseo@perthmint.com for more information.
Disclaimer
Past performance does not guarantee future results.
The information in this article and the links provided are for general information only and should not be taken as constituting professional advice from The Perth Mint. The Perth Mint is not a financial adviser. You should consider seeking independent financial advice to check how the information in this article relates to your unique circumstances. All data, including prices, quotes, valuations and statistics included have been obtained from sources The Perth Mint deems to be reliable, but we do not guarantee their accuracy or completeness. The Perth Mint is not liable for any loss caused, whether due to negligence or otherwise, arising from the use of, or reliance on, the information provided directly or indirectly, by use of this article.
Sources
ASFA Statistics
https://www.superannuation.asn.au/ArticleDocu...df.aspx?Embed=Y
Superannuation Returns
target="_blank" https://www.chantwest.com.au/resources/sup...h-straight-year
