Though equity indexes have bounced off their worst levels of 2020, Matt McLennan, head of First Eagle’s Global Value team, appeared on Bloomberg TV to caution that the full impact of the pandemic’s “gut punch” to the world economy may yet to be fully appreciated by markets.
The co-managers say times like these make the case to own gold strategically as a potential hedge and not as a bet for higher prices.
"If you're a long-term investor, it matters less what's happening to the markets as a whole, and matters more what you can find bottom up. At the end of the day, we're not betting on being all into markets. We're selectively buying into markets around the world and I think that's the key distinction."
The use of gold as a potential hedge against extreme market outcomes has long been a key tenet of First Eagle’s investment philosophy.
“One of the things that's important that we do a little bit differently at First Eagle, is we don't define value just in purely statistical terms."