Gold has been one of the most hated assets over recent years, but star manager Sebastian Lyon is betting on the precious metal to rebound.  By Alex Paget, Senior Reporter, FE Trustnet.  Monday May 18, 2015.  Click here for the full report.

The race by the world’s central banks to debase their currencies means holding gold bullion is vitally important in the current environment, according to star manager Sebastian Lyon, chief executive at Troy Asset Management.

Lyon, who heads up the highly popular Troy Trojan fund and Personal Assets Trust, recently told FE Trustnet that investors face the “particularly unpleasant” combination of very low returns and high volatility as years of extraordinary central bank monetary policy have left nearly all assets classes expensive and therefore highly correlated.

However, one area of the market the manager is optimistic on is gold bullion – which accounts for 11 per cent of his open-ended fund and 10 per cent of his trust.

Though the price of gold has fallen considerably since its peak in 2011 to its current level of $1,225, Lyon thinks it will start to become highly sought after as central banks’ total assets, as a percentage of GDP, continue to increase.

“Personal Assets is not a gold fund, although it has been accused of being one. But we have held gold going back to 2005 both as insurance against financial distortions but also as insurance against currency debasement,” Lyon (pictured), speaking at the Cantor Fitzgerald “Opportunities in Multi Asset Investing” seminar, said.

“We have talked about this relay race to debase. Clearly, the euro and the yen are at the vanguard at the moment but prior to that it had been sterling and the US dollar. The reason to hold gold is because we feel this race to debase is, if anything, likely to pick up speed and will not be reversed.”

Central banks, such as the US Federal Reserve, Bank of England, Bank of Japan and the European Central Bank have all tried to devalue their currencies over recent years in order to reflate their economies and reduce the cost of their debt.

Lyon added: “Ultimately, portfolios need some form of protection from this central bank unorthodoxy.”

Please read the full report here and then Contact Me for more information about investments in gold bullion.