Chief investment officer Chris Darbyshire said their “seatbelts were fastened” and they had made an early call on markets falling but were “not saying financial Armageddon is imminent”.
The bearish stance has resulted in 7IM holding 15.4 tonnes of gold, physically backed in passive structures including exchange traded certificates (ETC).
It means 7IM’s exposure to the precious metal is ahead of nations such as Ireland, United Arab Emirates and Czech Republic.
“We like the security of knowing that our gold exposure is backed by a vault of gold, mostly through Source Physical Gold, but with some exposure to iShares Physical Gold tacked on,” investment manager Ben Kumar said.
The 7IM asset allocated passive (AAP) cautious fund held 8.07% gold on 31 July this year and the adventurous fund 6.22%.
The AAP balanced and modestly cautious funds each held 7.17% in gold.
Darbyshire added: “It feels like markets are currently having an inverse symmetry with Q1 2016: back then, markets were relentlessly and unnecessarily negative. Today, we are faced with a sea of negatives, which at some stage we think the market will finally overreact to.”
Brexit, North Korean tensions, a Polish prime minister “intent on becoming a dictator” and sanctions in Qatar have all been enough to prompt Darbyshire’s cautious approach.
Donald Trump’s warning that North Korea would be met with “fire and fury” if they launched an attack on the US was met with a flurry of sales in the gold markets last week.
The price of gold rose 1.59% to £1.276 on Wednesday as investors flocked to the safe haven asset.
