Irish Pension Options with Exposure to Gold
Gold has long been regarded as a safe-haven asset, providing stability and protection against market volatility. For individuals in Ireland seeking to diversify their pension investments, funds with exposure to gold offer a unique opportunity. This guide explores the available pension options in Ireland that include gold-focused investments, their benefits, and key considerations.
Get your own pension review by using the contact options below which suit you
You can choose to get a review on an existing pension and/or enquire about setting up a new plan.
Why Include Gold in Your Pension Portfolio?
Stability and Protection
- Hedge Against Inflation: Gold has historically maintained its value, making it a popular choice during periods of inflation.
- Diversification: Including gold in a portfolio can reduce overall risk by offsetting losses in other asset classes.
- Safe-Haven Asset: Gold is often considered a store of value during economic downturns or market uncertainty.
Long-Term Growth Potential
- While gold does not generate income like dividends or interest, its value tends to appreciate over the long term, offering growth potential for retirement savings.
Pension Funds with Exposure to Gold
Irish pension options with exposure to gold typically invest in:
- Gold ETFs (Exchange-Traded Funds): Funds that track the price of gold or invest in physical gold.
- Gold Mining Stocks: Equities of companies involved in gold mining and production.
- Commodities Funds: Broader funds that include gold alongside other precious metals and resources.
Personal Retirement Savings Account (PRSA)
- Some PRSAs offer investment choices that include commodities funds with exposure to gold.
- Suitable for individuals seeking a flexible, tax-efficient retirement savings plan.
Self-Directed Pensions
- Self-Directed and Executive Pensions: Allow investors to choose specific assets, including gold-focused ETFs or mining stocks.
- Approved Retirement Funds (ARFs): Post-retirement options enabling continued exposure to gold investments.
Benefits of Investing in Gold Through Pensions
Tax Advantages
- Pension contributions and growth in value are tax-advantaged in Ireland, amplifying the benefits of holding gold.
Access to Professional Management
- Managed funds with exposure to gold benefit from the expertise of professional asset managers who balance risk and return.
Flexible Investment Options
- Investors can choose from funds with varying levels of gold exposure to match their risk tolerance and financial goals.
Key Considerations
Volatility
- While gold can provide stability, its price can be volatile in the short term. Investors should maintain a long-term perspective.
Fees
- Funds with exposure to gold may carry higher fees due to the specialized nature of the asset class.
Limited Income
- Unlike bonds or dividend-paying stocks, gold does not generate regular income, which may not suit all retirement strategies.
How to Get Started
Consult a Financial Advisor
- Seek advice from a financial professional to determine if gold fits your retirement objectives and risk profile.
Choose the Right Provider
- Many Irish pension providers offer funds with exposure to gold. Compare fees, performance, and investment strategies to find the best fit.
Regularly Review Your Portfolio
- Periodically assess your pension investments to ensure they align with your goals and market conditions.
Investing in gold through your pension can be a prudent way to safeguard your retirement savings against uncertainty. With options ranging from managed funds to self-directed choices, Irish investors have a range of tools to incorporate this timeless asset into their portfolios.
Our 2 cents…
Ian Heffernan, Senior Pensions Broker with Ocean.ie is an expert in specialised pension asset allocations – and he writes;
Gold, the most traditional store of value humans have used for thousands of years. A shiny and precious metal that wars have been fought over and history shaped because of same.
Nowadays, gold is mainly used as a store of value with tons of it sitting in central bank vaults in most capital cities. Traditionally, gold went up when the stock markets went down (and vice versa) as people would shelter from market volatility and gold was seen as the “safe haven”. These are, however, unusual times and both gold and equities are rising at a rapid rate currently. It, of course also has practical uses such as jewelry making, electronics, space exploration and medicine and dentistry.
There are many countries in which physical gold is used as a gift or an investment for the future. It might be given to a child’s parents after the child is born with the purpose of being used for the child’s education. Alternatively it may be gifted for a birthday or even a marriage this is common across Asia, the Middle East and Africa.
In the last few years, retail customers are starting to move the needle when it comes to investing in gold and pushing the price upwards (up almost 49% in the last 12 months).
You have the opportunity to invest in gold through your pension. This means tax free investment and tax free growth in an asset that seems to have huge momentum (9.86% average growth rate over the last 10 years). Gold is now growing faster than many of the tech stocks or the multi asset funds. It is recommended by most advisors that you hold 5-15% of your portfolio in gold.
Zurich and Aviva have physical gold funds which track the spot ounce price of gold and therefore the returns are directly linked to gold price.
There are other ways to get exposure to gold such as investing in mining stocks or ETFs which we can also facilitate through a pension using a Cantor Fitzgerald account
