Gold as the Ultimate Wealth
Preservation Tool

• 12 March 2026
• Wouter Klijn

Sydney-based BMF Wealth is unlike any other private wealth company with its firm belief in the role of gold as a key anchor of investment portfolios. We speak with BMF Wealth’s Jill Nes to delve into the underlying philosophy of this approach

One afternoon in early 1970, Cape Town, South Africa, Jill Nes’s mother picked her up from school. But instead of heading home, they went to the bank to buy one of the first-ever fine gold coins, the Krugerrand.

Earlier that day, the bank had contacted her father to let him know the new coin was available that day and likely only that day. The bank wouldn’t hold it for long. After having waited for months, the family took no chances to secure their gold coin.

The Krugerrand was introduced in 1967 to help promote the sale of South African gold. One coin has one ounce of fine gold in it as part of a 22-carat gold/copper alloy, which makes it more durable than pure gold.

In subsequent years, the Krugerrand became one of the most traded gold coins in the world and by 1980 trade in the coin represented 90 per cent of the international gold coin market, according to New York Magazine.

The gold price in 1970 was around US$36 an ounce and Jill’s mother bought the coin for less than US$100. Today, a single coin is worth over US$5100.

Nes is the Chief Executive Officer of BMF Wealth, a Sydney-based, multi-family and global private wealth firm with about 180 clients and $1.7 billion in assets under management. Gold is still a key part of her life as it forms one of the key anchors of the firm’s investment strategy and has helped drive the total returns of its clients’ total portfolios on average between 20 to 30 per cent for the past 12 months.

“It is the ultimate store of wealth. No matter if a ship goes down, 500 years later the gold is still there, untarnished, still appreciating in value,” Nes says in an interview with [i3] Insights.

Nes, who has been with the firm for almost 20 years, is still passionate about the role of gold in portfolios, a philosophy she shares with BMF Wealth Founder and Executive Chairman Barry Mendel.

No matter if a ship goes down, 500 years later the gold is still there, untarnished, still appreciating in value

“Our gold exposure is about 20 per cent of the total bottom line of the client portfolio. And this gold allocation is made up of gold bullion, as well as gold shares. And with gold bullion, we don’t buy the paper ETFs. We actually assist the client in buying physical gold, both gold coins and bars,” she says.

BMF Wealth uses ETFs in other parts of the portfolio, but it doesn’t think it is appropriate for gold. There is more paper gold in ETFs and derivatives than there is in physical gold bullion, Nes says. That is a concern.

Besides, one of the key attractions of gold is the fact it is valued across nations and is transportable.

“Client capital is irreplaceable, so we need to protect it and diversify it, not only across the asset classes, but across multiple custodians and multiple jurisdictions,” Nes says.

Gold as an Inflation Hedge

Historically, investors have used gold as a hedge against inflation, since its value tends to rise when inflation is high. Partly this is because gold is a finite resource and so its supply cannot be increased to meet demand, unlike paper money.

Investors also like gold in times of falling interest rates. As the return on cash falls, they hope gold can stem some of this falling yield by increasing in value or at the very least not falling as much as cash.

Gold also tends to increase during periods of volatility because investors see it as a safe haven. It is not tied to a specific country or region and can act as a store of wealth in times of domestic economic turmoil.

In the current volatile environment, where geopolitical tensions are rising, technological progress is disrupting business models and labour markets, and monetary policy is fickle, gold has had an impressive rally.

Global concerns about the reliability of the US dollar as the reserve currency have further boosted the price this year. The gold price broke through US$5000 (AUD$7230) per ounce for the first time in January 2026, while only five years earlier the price was still hovering around US$1500 per ounce.

The increase is so steep that traditional models of calculating gold’s fair value, which rely on real bond yields and inflation forecasts, cannot explain the current levels.

But Nes doesn’t believe it is time to sell out of the precious metal, although the firm has been rebalancing client portfolios back to the target weight of 20 per cent following the recent run up.

We are mainly just trimming, depending on the percentage, but I’m still happy with 20 per cent … we eat our own cooking, so therefore I own more than 20 per cent gold in my personal portfolio

“We are mainly just trimming, depending on the percentage, but I’m still happy with 20 per cent … we eat our own cooking, so therefore I own more than 20 per cent gold in my personal portfolio,” she says.

Despite the steep increase in the gold price over the past five years, gold still plays an important role in today’s environment, she says.

“The reason is the debasement of money. The central banks, including in America, are printing money. Something has to give. So the main reason that we invest in gold is because of the debt caused by central banks around the world. It’s just not sustainable,” she says.

“We think that gold is going to have to be revalued.”

Another reason why Nes still believes in gold at the current price is geopolitical risk and the potential for further conflicts, which might affect global markets.

“Maybe it is the South African in me, but in the old days in Eastern Europe fleeing the Holocaust, you could always just take that coin or bar and it would buy you something. It was tangible,” she says.

“We like it for all of those reasons.”

Investing in Gold Equities

BMF Wealth invests not only in physical gold, but also in gold companies. One of its favourites is Evolution Mining, which is among its largest positions in its portfolios. Evolution is the product of the merger between Catalpa Resources and Conquest Mining in 2011 and Nes has known the CEO, Jake Klein, and has been an investor since his Conquest days.

“Years ago, I came across a small gold mining company called Conquest and met with Jake. So when Conquest acquired another company on the ASX, called Catalpa, and merged to become Evolution, Barry and I were already owners then,” she says.

Maybe it is the South African in me, but in the old days in Eastern Europe fleeing the Holocaust, you could always just take that coin or bar and it would buy you something. It was tangible

Following a company closely is part of the firm’s investment process and Nes meets with management several times a year and has even been out to the mines to inspect the sites.

“We’re not just talking to management, we went to [Lake] Cowal, near West Wyalong. It is important to see what the operations look like. We are obviously not experts on their operations, but you can get a tangible feel of it,” she says.

The company has been benefitting from the rally in gold and has done well for clients. Evolution Mining is up 27.3 per cent this year and increased by no less than 160 per cent over the past 12 months.

Gold as a Defensive Asset

To some degree, BMF Wealth’s high allocation to gold replaces the traditional balanced fund’s allocation to defensive assets. For example, the firm does not invest in government bonds.

“No, we never touch government bonds. Our interest comes from cash. We always like clients to have a decent amount of cash,” Nes says.

The firm does invest in private credit and uses external managers to run these exposures.

Having a 20 per cent allocation to gold is uncommon in the institutional investment industry as gold is still often seen as a speculative asset, lacking intrinsic value beyond limited usage in industrial applications and jewellery.

But in recent years, more instos have dipped their toe in the water and it seems to have paid off for them.

Ontario Teachers’ Pension Plan attributed its strong results over the first half of 2025 partly to the sale of its 19.9 per cent stake in gold mine New Afton Mine to New Gold for US$300 million.

The $4.7 trillion Norwegian Government Pension Fund Global reported strong gains from the gold and silver rally in 2025, contributing to its overall 15.1 per cent return for the year.

In a position paper, published in November last year, the Future Fund argued “gold exposure acts as a store of value during periods of monetary inflation and geopolitical uncertainty”. According to the AFR, the fund has invested as much as $1 billion in gold ETFs.

The question is whether these institutions are leading the way for gold to become a mainstream asset in portfolios or whether this will turn out to be a short-lived experiment.

But for Nes and her colleagues there is no doubt gold serves a role in portfolios.

The Krugerrand

The early experience of acquiring a gold coin from the bank in the early 1970s has left an enduring impression on Nes and to a degree shaped her thinking about robust investment portfolios.

Asked if she knows what happened to it, she reveals she now owns it.

“It is a funny story. Many years later my brother came to me and he said: ‘Jill, I know you love collecting coins, do you want to buy one from me?’ So I bought the coin from him,” she says.

“Three months later, I’m having my parents around for dinner and I casually mentioned: ‘Dad, I bought a coin from Chris,’ and my dad exploded. He said: ‘I gave it to him.’”

It turned out to be the coin in question.

“In those days, it was traditional for the son to be the heir, but that’s how I’ve got it today. We can all laugh about it now,” Nes says.