Friends Provident is set to offer a new precious metals investment fund that holds platinum, as well as gold bullion and silver.

It will provide a hedge against inflation and insurance against political risk and other conflicts making the fund ideal for investors looking to diversify their portfolio away from equities and bonds.

According to Friends Provident, the fund will give exposure to platinum, gold and silver at about half the volatility of typical gold equity based funds.

"The direct holdings of precious metals in the Fund is a different proposition to long-only commodity based equity alternatives and will be well received given continued uncertainty and rising inflationary pressures in global markets," said Jim Henning, manager of funds marketing and research.

He said that precious metals continued to offer investors the best insurance against the risk of inflation.

Meanwhile, exchange-traded notes (ETN) are failing to attract investors because of credit risk, complicated strategies and uncertainty about tax status.

ETNs offer investors returns tied to listings such as platinum meaning it is easy to launch new ETNs.

But according to reports from the Wall Street Journal, ETNs targeting aluminium, cocoa, coffee and platinum offer a smaller presence in the market.



Source:

New ETNs Fail To Grab Investor Interest, 17/07/08
http://online.wsj.com/article/SB121632801697263153.html?mod=googlenews_wsj

Friends Provident to offer Castlestone Management Precious Metals Fund, 17/07/08
http://www.mineweb.com/mineweb/view/mineweb/en/page674?oid=56947&sn=Detail