Gold’s role in the modern family office portfolio

Family offices continue to successfully leverage their agility, commitment to diversification, and increasing appetite for alternative assets, including gold, as they navigate complex market conditions and position for long-term, sustainable returns.

In today’s ever-evolving financial environment, family offices hold a distinct advantage. Backed by liquidity and patient capital, they have the flexibility to act decisively on market dislocations and emerging opportunities, often outpacing traditional institutional investors. This agility, paired with a strategic mindset, has enabled family offices to stay resilient in the face of macroeconomic and geopolitical uncertainty.

We’ve observed a marked shift in portfolio composition among family offices, with increased allocations to private equity, real estate, private debt, and derivatives. These alternative assets offer uncorrelated returns and enhanced diversification, critical attributes in navigating ongoing volatility. As stewards of intergenerational wealth, family offices are taking a proactive approach to risk management and asset allocation.

We’ve observed this evolution firsthand in our ongoing dialogue with family office investors, many of whom are seeking investment approaches that balance diversification with the ability to respond to shifting market dynamics. Strategies like our Global Multi-Strategy Fund (GMF) have been designed with these objectives in mind - offering flexible exposure to a broad set of asset classes, with responsiveness to themes such as persistent inflation and rising input costs across labour, materials, and energy.

Gold has emerged as a key pillar in this strategy. In uncertain times, it remains a proven store of value, with enduring appeal as a hedge against volatility and inflation. Our family office investors have long appreciated the strategic role of gold, and recent market developments continue to validate that view.

In June 2025, gold rose 0.4% in USD terms to US$3,303/oz, while the average gold price in AUD reached A$5,129/oz, marking the largest quarterly gain since 1979. Our Victor Smorgon Partners Resources Gold Fund has capitalised on this momentum, delivering a net return of 54.2% in FY24-25, significantly outperforming both local and global gold indices.

While gold has performed strongly, we believe the upside is far from over. The price has risen for six consecutive months in 2025, and our internal view suggests it could trend toward US$4,000/oz. This is being supported by a structural increase in demand, with central banks accumulating more than 1,000 tonnes annually for the past three years, more than double the historical average.

In response, our flagship GMF maintains a ~15% allocation to gold, primarily through carefully selected gold mining equities. For our investors, this allocation provides superior risk-adjusted returns with reduced portfolio volatility. Despite strong fundamentals, gold miners remain undervalued, trading at a forward EV/EBITDA multiple significantly below broader market averages, with implied margins exceeding A$1,500/oz.

From our vantage point, gold continues to serve as a powerful hedge, a source of resilience, and a key contributor to long-term capital preservation. As we partner with our investors through this next chapter of economic transition, gold and alternative assets remain central to achieving enduring outcomes.

Victor Smorgon Partners, the Group’s privately owned Family Office investment vehicle, not only invests on behalf of the family of the Victor Smorgon Group, but for those wishing to access the same compelling opportunities to build their own generational wealth. To learn more, visit www.victorsmorgongroup.com.au/invest-with-us