Ohio Pension Fund jumps into gold market with 5% allocation
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(Kitco News) - Growing uncertainty surging through global financial markets is helping to shine a spotlight on the gold market as more generalist investors and funds look for safe-haven assets.
According to media reports, the Ohio Police & Fire Pension Fund (OP&F) approved a 5% allocation into gold in a move to diversify its portfolio and hedge against the risk of inflation. The fund currently holds about $16 billion in assets under management. The gold recommendation was made by the fund's investment consultant, Wilshire Associates,
"OP&F and Wilshire believe that the addition of gold will give the portfolio a strong diversifier to its growth-oriented investments as well as provide an effective hedge against inflation," the fund said in a statement.
George Gero, managing director of RBC Wealth Management, said that it is not surprising to see generalist fund move into gold as inflation threats continue to rise.
"More and more pensions are going to need to protect themselves against rising inflation and the falling value of currencies," he said. "They are going to be looking very closely at gold."
Last week in a speech from the annual Jackson Hole central bank summit, Federal Reserve Chair Jerome Powell said that the U.S. central bank will target average inflation of 2% and emphasize 'broad and inclusive' employment.
Gero said that this is the latest example of how the central bank will use inflation to devalue the U.S. dollar. Monday.
The OP&F is the latest generalist fund to make headlines in the precious metals markets. More than two weeks ago, Warren Buffett's Berkshire Hathaway surprised gold investors after filings showed that it bought nearly 21 million shares of Barrick Gold.