I have devised a new strategy for beating the stock market. All you have to do is own gold. Because gold has outperformed World equities for the past 30 years for UK investors!

Surprised? Well check out the annualised returns:

Time horizon	Gold (%)	World equities (%)
One year	40.2	9.1
Five years	11.4	7.2
Ten years	11.9	9.6
20 years	9.2	6.7
30 years	6.1	6

Data from The London Bullion Market Association, and MSCI. February 2026. All returns quoted in this article are inflation-adjusted total returns (GBP).

Gold is killing equities by four percentage points a year for the past five years. Though that’s a bit short term for my liking – so how about 2.5 percentage points a year for 20 years?

That’s a lot. It looks like this:

Granted, the return differential is marginal if you go back 30 years: 6.1% gold plays 6% equities. But gold is still ahead.

Plus it’s having an awesome year to date!

If gold keeps going, or the so-called AI bubble pops, then the yellow metal’s lead will spread further back into the historical record like an ink stain soaking through paper.

How long is the long term?

By the yardstick of the average mortal investor, 30 years is a pretty compelling time horizon. It certainly sounds like a long stretch for one asset to have the whip hand, no?

Don’t these numbers also call into question that story about gold basically being a shiny Ponzi scheme?

Well yes, I do think that view is too dismissive. I believe gold is worthy of its place in our portfolios.

But in my opinion the long-run performance figures above are more misleading than clarifying.

It’s not because gold beats equities that it’s useful. It’s because it repeatedly rides to the rescue when stock investors are in despair.

Gold also has a penchant for coming good during periods of uncertainty not unlike the one we’re living through now…

Golden years

The first thing to note though is that gold’s returns are highly sensitive to your chosen start date, which muddies the waters no end.

Here are three reasonable long-term baselines for comparing gold against other assets:

Time horizon	Gold (%)	World equities (%)	Baseline
51 years	2.8	6.8	Gold price fully liberated in 1975
56 years	4.8	5.2	MSCI World Index inception
126 years	1.4	5.6	Dawn of the 20th Century

​​Inflation-adjusted annualised total returns (GBP).

If I wanted to press the case against gold then I’d quote the 126-year timeline above, and neglect to mention the price was heavily regulated before the shackles finally came off in 1975.

On the other hand, if I was a total gold bug then I’d shout about gold and equities being neck-and-neck over 56 years.

Pick the compromise date of 1975 though and order is restored. Gold has some value as a minor diversifier, while equities remain paramount.

But their relationship is really more complex than that – and a fortuitous one for investors.

Sheer doubloon-acy

The next thing to put on the table is the 31-year mega gold drawdown:

Gold sank 78.3% over 19 years from 1980 until 1999. Buyers sucked in by gold’s 77.6% gain in 1979 (98% nominal!) didn’t break even again until 2011.

That loss weighs heavily on gold’s track record. It distorts average returns around it like a black hole bends light.

So if I pick a long-term comparison date that veers too close to that event horizon, then gold looks weak.

On the other hand, gold’s average return ticks up when observed at sufficient distance from the super-massive scary-thing pressing upon investing space-time.

Both outcomes are true, relative to the observer – as the next chart shows:

Trend lines show ​​inflation-adjusted cumulative total returns (GBP) to 31 December 2025.

A gold investor who went all-in on New Year’s Eve 1979 (green line) would not be as happy as one who entered the market on New Year’s Eve 1969 (yellow line). Meanwhile Mr New Year’s Eve 1999 (purple line) would still be partying like Prince himself.

The upshot? Your entry point matters – as I believe The Purple One knew only too well.

The green line is the path taken by the performance-chaser who piled into gold near its 1980 peak. Notice how this sucker got hammered by gold’s mega drawdown for the first 20 years. Recovery only begins in late 1999. Eventually – more than 25 years after the comeback begins – Mr Green looks back on 2.4% annualised returns.

By contrast, the yellow line enjoys a decade of growth before giving up most (but not all) of its early gains to the 1980-99 abyss. A quarter of a century later, Colonel Mustard or whoever this is, has come through it all to post highly-respectable 4.8% annualised returns.

Finally, gold’s galactic collapse is but a historical curiosity to the purple-lined investor. For them, it’s onwards and upwards to a glittering 8.8% annualised return.

Of course, every asset’s returns are path dependent. But gold’s outcomes can be particularly divergent. Which helps explain why gold ownership is so divisive, and why some are fanatical about it and others indifferent.

In short, it’s why gold tastes of Marmite.

Crisis management

The next chart shows more clearly why gold is worth owning (I hope). See how the yellow line zigs when equities zag:

Gold and equities are both volatile as hell. They’re also extremely careless: losing decades all over the shop.

But for over half-a-century they’ve counterbalanced each other remarkably well.

In fact, nothing else has compensated as effectively as gold for equities’ worrying habit of going nowhere for years.

Meanwhile, equities typically buck up as gold spirals down.

Here’s the numbers for the lost decades for each asset shown in the chart above:

Lost decades	Equities return (%)	Gold return (%)	Peak loss (%)	Offset at peak loss (%)
Dec 1972 – Dec 1984	0	144.1	-56.1	191.5
Jan 1980 – Jul 2011	655.7	0	-78.3	665.2
Aug 2000 – May 2014	0	201	-50.7	8
Oct 2011 – March 2020	104.1	0	-40.2	53.6

​​Gold counters equities losses, equities counter gold. Inflation-adjusted cumulative total returns (GBP).

Gold returned 144% when equities went sideways for 12 years from 1972 to 1984. During that period, equities losses hit -56% in April 1980. But gold was up 191.5% at the same time.

The rest of the table repeats the same story. You can see how equities counterbalance gold’s peak losses, and vice versa. (Equity drawdowns are shaded in the table and gold’s aren’t. ‘Offset at peak loss’ is the gain of the countervailing asset when the ‘lost decade’ asset registers its worst loss.)

Driven to extraction

As that last table shows, gold refutes the old market adage: all correlations ‘go to one’ in a crisis.

Clearly gold brings its own bag of troubles along with it. But happily, equities help you bear those in turn.

Of course there are no guarantees. Gold wasn’t the best diversifier during the Dotcom Bust. It also dipped 30% initially during the Global Financial Crisis (GFC) before finally answering the alarm call.

There’s almost bound to be a financial disaster eventually that features gold and equities sliding together.

So I’m not arguing for the 60/40 portfolio to be recast as 60/40 split between equities/gold. But I am saying that gold has a solid role to play in smoothing the returns of a well-diversified modern portfolio alongside more traditional bedfellows like bonds and cash.

And yet, I still have my reservations…

Yellow alert

If you view your portfolio assets in isolation – rather than as part of a balanced team – then gold can be hard to live with. Not now, when it’s going gangbusters, but whenever it next fails to shine.

That time will come, probably quite soon, because gold is sickeningly volatile as we saw in the chart above. It’s even more of a rollercoaster ride than equities.

For example, 39% of gold’s annual returns were negative from 1970 to 2025. As opposed to just 28% of years being down for equities.

Moreover gold spent 31 years underwater up until July 2011. It then rose to new highs for all of three months before diving back in the red – where it stayed for another nine years!

Essentially, gold was underwater for over 39 years between 1980 and 2020. (While paradoxically saving the day during the GFC. So again, it depends when you bought in.)

In sum, the barbarous relic is even more painful to own than World equities as a standalone asset. If you can’t handle having your patience sorely tested, then forget about owning the yellow metal.

However, if you are willing to hold an asset for its strategic value – as opposed to highly uncertain short-term profits – then consider allocating a chunk to gold.

So metal

I’ll close out with the latest in a series in which Warren Buffett says in a couple of sentences, 20 years ago, what I struggle to say in a thousand words today.

Here’s a wonderful gold quote from the old maestro that encapsulates the dilemma:

Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything.

I completely buy that. You can see from the last chart that gold spikes in eras of great turmoil, when confidence crumbles in the system itself: the Oil Crisis of 1973-74, the Second Oil Crisis of 1979, the GFC, and close cousin the European Sovereign Debt Crisis.

Which brings us up to the current era of instability, which some characterise as a polycrisis. (Sounds more like a depressed parrot to me.)

If you think we’re heading for an age of peace, prosperity, and political harmony, then gold should be redundant. But personally I’m happy to wager 10% of my portfolio on fear.

After all, it looks like fear gains the upper hand quite often:

Take it steady,

The Accumulator

What caught my eye this week.

One thing crowdfunding investors should be used to is losses. At least 75% of start-ups fail, and I haven’t seen any evidence of those firms that turn to a whip round from ordinary investors bucking the trend.

Unfortunately, my sense is that most crowdfunders who chip in to back a company – especially those who put more money in than they should – too often don’t appreciate such statistics.

That’s partly because every person I’ve ever spoken to about their crowdfunding only backs a few companies. Often only one!

And as I’ve written before about venture capital investing, spreading your money around is the best way to try to get any sort of credible return. At least in financial terms.

What other kind of returns are there, you might retort?

Indeed it’s a fair – if I’d suggest rather too narrowminded – view to say there aren’t any.

However it’s obvious that many of the people who invest in the likes of supposedly-alternative beer company Brewdog do so for non-financial reasons.

Perhaps it’s for the investor perks and freebies. Maybe they like feeling they’re part of something, or that their money is helping to build a brand new company rather than just shuffling share ownership around.

With Brewdog case I’m sure some even believed they were sticking it to the man…

Downward dog

Alas, Brewdog was flogged off this week for parts. According to the BBC:

US beverage and medical cannabis company Tilray has bought the company’s UK brewing operations, brand and 11 pubs in a £33m deal.

Administrators said the sale had preserved 733 jobs – but that 484 jobs had been lost and 38 bars had closed after they were not included in the rescue deal.

And they said no equity holders – including those who invested in the brewer’s Equity for Punks scheme – would get any return from the deal.

Now there are several aspects to this story that do stick in the craw.

Unite says workers were treated very shabbily. Management of the company has been controversial for years, and neither the decline in Brewdog’s fortunes nor its ignominious end will have repaired any reputations.

As for investors, as the BBC tells us:

In 2009, the firm launched a fundraising scheme called Equity for Punks.

About 200,000 people put money into the scheme, which offered a stake in the company, discounts and perks. The investors typically spent about £500 on shares costing £20 to £30 each, although others invested larger sums.

Before it closed to new investors in 2021, Equity for Punks is said to have raised £75m which was used to expand the business into an international brand. In 2017 a US equity firm TSG Consumer Partners acquired a 22% stake in Brewdog.

But unlike the Equity for Punks’ “ordinary” shareholders, TSG was given “preference shares”.

That meant that if Brewdog was sold, TSG was first in the queue to get back its investment plus any return owed, possibly leaving little or nothing for small investors.

One thing not mentioned in this summary is Brewdog’s 2020 valuation – the last time it secured ‘Punk Equity’ money – of £1.8bn. This raised a further £30m.

From nearly two billion quid to a fire sale in six years is some going – even for a post-Covid collapse.

Dog days

I’m not going to dissect Brewdog’s swan dive today. Another BBC article offers an even-handed overview.

I would note though that Brewdog is far from the only then-bright-and-shiny company to have achieved a batshit valuation in the weird pandemic era, only to shortly afterwards see things turn south faster than Scott of the Antarctic on the whiff of a Norwegian.

However I do get a bit dismayed by the various stories of woe from Brewdog shareholders.

Of course I’m sympathetic. Nobody likes to lose money, and Monevator is a site for ordinary investors that tries to help them make it, not lose it.

For what it’s worth I had £500 in Brewdog, too. I’d guess I enjoyed about £100 to £150 in perks and discounts. Carrying the capital gain loss forward will save me another £100 or so some day. Call it £300 down the tubes.

Would I rather I hadn’t invested in Brewdog? Yes, of course.

But does losing a few hundred quid on it upset me? Not really – and not because I can’t think of much more entertaining ways to dispose of £300.

Spread manure around

Rather, I’ve invested in dozens of crowdfunded startups (and follow-on rounds) and I fully expect a lousy result from most.

VC returns notoriously go to a few winners. That is what I am seeing in my own portfolio and what shapes my strategy.

As a counterpoint to Brewdog, I recently liquidated a portion of a private company holding that – after tax relief – has returned over 30-times my investment. That sort of return covers a lot of failures.

This isn’t to brag. Not least because I haven’t a lot to brag about! As I said, there have been a lot of failures to cover. Before this recent disposal I was slightly underwater on a ‘money out’ basis.

My ongoing portfolio however is valued at 2-3x the money I invested. Moreover I judge most of those valuations to be pretty sound after a tough few years. (War shocks notwithstanding.)

Time will tell, but for me this experimental allocation of a small portion of my capital is looking like it’ll deliver tracker fund returns for a lot more work – but, for me, more fun and interest too.

How to lose money responsibly

We can debate whether I should get out more, given that I consider this sort of thing to be fun.

My point though is that this isn’t how most people do their crowdfunding.

A majority probably plump a couple of hundred quid into one or two companies, and that’s fine.

But judging by the stories that emerge when things go wrong, too many seem to stick meaningfully large-for-them lump sums into start-ups that they feel some affinity for, and they often don’t appear to anticipate the downsides. As such they take on far more risk than they should. Sometimes with woeful outcomes.

That is dispiriting. It has me wondering if individual investment sizes should be capped, say, on top of the existing ‘sophisticated investor’ tests that supposedly restrict the sector.

However I wouldn’t like to see crowdfunding regulated away. I think there’s something to be said for democratising capitalism in its rawest sense this way.

And for what it’s worth there are (a small number of) backers in the likes of Revolut who have made truly life-changing sums of money. I know some read this blog.

But if you’re tempted to try crowdfunding I’d suggest you:

• Invest only what you can afford to lose in any one company. Because you probably will.
• By all means back firms you find inspiring or fun. But understand that is part of your return.
• Ditto the perks and discounts. They are nice to get but they also might be all you get.
• Either invest very small amounts of money (for you) in a few companies you really like, or adopt a VC approach and spread it widely. Don’t put big chunks of your net worth into companies that are statistically very likely to go bust.
•  Don’t get involved with crowdfunding unless you’re already sensibly saving and investing for your future.

Money for nothing

Plenty of Monevator readers would say my bullet point list should start and end with ‘Don’t Do Crowdfunding’ and I understand that point of view.

From a personal finance and investing perspective, crowdfunding is entirely superfluous. It will more than likely leave you needing to find and save more money to make up for the losses it delivers.

But I still see a place for it akin to a carefully budgeted night out in Las Vegas for those who think it seems like an exciting way to lose money – and as a potentially modestly lucrative hobby for a minority.

Just please please don’t confuse it with proper investing for your long-term financial security.

Have a great weekend!

[continue reading…]

Okay, so you know your inc from your acc. But do you know your retail from your institutional? Your dirty from your discounted? Your clean from your super-clean?

I am, of course, talking about fund share classes. The hottest topic at dinner parties across the land.

Where did they all come from? What do they do? Does it even matter?

Let’s start with the basics and work up.

The basics

An investment fund may have many share classes or unit types. Each share class will be invested in the same assets but may vary by:

• Whether dividends are paid out in cash (inc, for income) or accumulated in the unit price (acc)
• The level of fees – initial and ongoing
• The trading or hedging currency

Note, we’re only talking about investment fund share classes. Listed companies can also have varying share classes, but that’s a different kettle of fish.

An investment platform may only allow you to invest in a subset of the available share classes. For instance, you’ll usually only get one trading and (if applicable) hedging currency. It should be clear from the fund name which one you are investing in.

Next some examples. (Share class data is from Trustnet.)

Vanguard LifeStrategy 60%

This perennial Monevator favourite is admirably straightforward. Just two share classes – one inc and one acc – and no fee variation:

Name	Ongoing Cost
Vanguard LifeStrategy 60% Equity A Shares Acc	0.20%
Vanguard LifeStrategy 60% Equity A Shares Inc	0.20%

Rathbone Global Opportunties

Less relevant to your average passive investor but a popular fund nonetheless, Rathbones Global Opportunities also has just two share classes. But this time the difference is in the fees:

Name	Ongoing Cost
Rathbone Global Opportunities Fund I Acc GBP	0.77%
Rathbone Global Opportunities Fund S Acc GBP	0.51%

An investment platform will typically only support one of these share classes, but not necessarily the same one as other platforms:

Platform	Share Class
Hargreaves Lansdown	S
Interactive Investor	I and S
Scottish Widows (née iWeb)	I
Fidelity	S
AJ Bell	I

iShares Environment & Low Carbon Tilt Real Estate Index

This last example is a constituent of the Monevator Slow and Steady portfolio. It really is a smorgasbord (as Ms Reeves would say):

Name	Ongoing Cost
iShares E&LC Tilt Real Estate Index H Acc	0.17%
iShares E&LC Tilt Real Estate Index S Inc	0.11%
iShares E&LC Tilt Real Estate Index X Inc	0.02%
iShares E&LC Tilt Real Estate Index L Acc	0.22%
iShares E&LC Tilt Real Estate Index H Inc	0.17%
iShares E&LC Tilt Real Estate Index S Acc	0.11%
iShares E&LC Tilt Real Estate Index X Acc	0.01%
iShares E&LC Tilt Real Estate Index D Inc	0.17%
iShares E&LC Tilt Real Estate Index D Acc	0.17%

Again, different platforms support different share classes, sometimes for seemingly arbitrary reasons:

Platform	Share Class
Hargreaves Lansdown	S
Interactive Investor	D
Scottish Widows (née iWeb)	D and H
Fidelity	D and H
AJ Bell	D

Classes D and H vary only by the initial charge – it’s usually waived by the platforms, so it won’t make any difference in practice.

A brief history of share classes

Back in the ‘good old days’, adviser commission was usually bundled in the cost of a fund for retail investors. Thus, annual fund fees were often around 1.5%, with half going to the adviser or, if you didn’t have an adviser, just swallowed by the fund provider along with its own cut.

If you were lucky and invested via one of the then-emerging fund supermarkets or platforms, you could get a cash kickback – effectively giving you back a portion of your own money.

Good times!

Then, at the end of 2012, legislation known as RDR came along and spoiled the fun. Bundled adviser fees and cash kickbacks to platforms were banned. The old retail or bundled (aka ‘dirty’) share classes were phased out. Individual investors were given access to the institutional class – or ‘clean’, as it was free of commission.

But some platforms (notably Hargreaves) still wanted to negotiate a discount on fund fees.

In response, as well as the clean share class, fund providers started launching discounted, or ‘super-clean’ share classes, with a few basis points shaved off the fees.

Where will it all end?

In the years after RDR, the number of share classes ballooned as different platforms secured different deals.

Over time though, things have begun to simplify again. The old retail share classes have disappeared. The discount levels have narrowed.

Terms like bundled, clean, and super-clean are all pretty much meaningless now. Just relics of history.

Maybe we’ll eventually end up with the Vanguard model, with just a pair of inc/acc share classes and one level of fees for everyone.

But for now you may need to navigate multiple options, and slog though the fund details for more info.

So which one do I want?

First, decide between inc or acc. That is, do you want some regular cash income or would you prefer to keep it all rolled up in your growing investment?

(Consider the tax complications outside of ISAs and SIPPs before making your mind up).

With that, you’re probably done. Your platform will usually offer only one fee level, one trading currency, and one hedging currency, if any, for your chosen share class.

If you do see multiple fee levels then obviously you want the cheapest. But in many cases, even where platforms support multiple share classes, they will steer new investors into the cheapest one anyway.

Stuck in an expensive class?

Sometimes you’re not quite so lucky.

In the Rathbone example above, you’ll see that Interactive Investor supports both the I and the S class. This is probably because it initially supported the more expensive I class, but later successfully haggled with Rathbones to get access to the cheaper S class.

While new investors are now funnelled into the cheaper S class, old investors are left languishing in I with the extra fees.

If you’re such an existing investor, then what you need is a conversion.

Conversions

A conversion is a transaction that converts a holding in one share class to another share class in the same fund.

A conversion is not a switch. The change from one class to another happens at a single point in time. The holding is not sold and then invested again.

This distinction matters. A switch means you may be out of the market for a short time and subject to the vagaries of swing pricing (where dealing costs could move the price against you). With a switch, it would be easy to lose more from adverse price swings than you’d ever save in lower fees.

A conversion does not present these risks.

A conversion will also not trigger any capital gain. Neither should a switch as long as the underlying fund is the same, although it may result in some confusion, for instance on book costs and equalisation (as raised in the comments to my article on transfers.)

Why don’t we just convert then?

Because your platform probably won’t let you.

I don’t know of any mainstream investment platform that enables an investor to convert an existing holding (even though they can process conversions, as we will see shortly).

The last time I tried calling my platform to request a conversion, the administrator patiently explained to me what a switch was, as if talking to a small child. I got nowhere trying to explain the difference.

Perhaps, as the number of share classes continue to be rationalised, this problem will become rarer. But as a cost-obsessive Monevator reader, it’s irritating if you’re the unlucky one who gets stuck with unnecessary extra fees.

The transfer problem

Imagine you had a holding in the iShares real estate fund above at Interactive Investor (in the D class) and you want to transfer in-specie to Hargreaves Lansdown (which only supports S).

You can’t simply re-register the units across as you would if it was the same share class. You need someone to do a conversion.

It is ironic that, whilst RDR forced platforms to support in-specie transfers, it also prompted a flourishing of different share classes that made many in-specie transfers impossible.

This problem required more rule changes from the FCA (Making Transfers Simpler, introduced in 2019) to fix the problems created by the earlier policy.

Platforms must now convert share classes where necessary to complete an in-specie transfer and then move the investor to their cheapest share class.

So today you generally don’t need to worry about share classes when transferring. Either the old platform will convert before transfer, or the new platform will convert afterwards – or both.

A convoluted conversion

It’s frustrating. Platforms can process conversions but choose only to do so for transfers where the regulations insist on it.

However more cunning readers may have already spotted a decidedly convoluted workaround.

If, in a situation like the Rathbones example above, your platform won’t convert your holding to a newer, cheaper share class, then one option is to transfer your account elsewhere and then transfer it back again.

The FCA rules mean that by the time you get your investment back where it started, one of the platforms involved should have converted you to the cheaper class.

I’ve never done this, but I see no reason why it wouldn’t work in theory. In practice, it may well turn out to be too much of an admin headache.

So what?

Maybe you’ve never needed to think about share classes. And maybe you never will. (I know, I waited right until the end to admit it!)

You’ll probably:

• Only need to choose between inc and acc
• Never be given a choice of currencies or fee levels
• Never have to worry about transfers
• Be happy with the share class you’re given

But it’s just possible that you may get stuck in an expensive share class, or have a transfer go awry with share class mismatches. If you do hit a problem then you may not get much sense from your platform helpline – and knowing your share class onions might just help.

Ever been stuck in an expensive share class? Know of any platforms that will process a conversion for you? Ever tried the transfer dodge?! Let us know in the comments below.

Oh – and that bit about share classes and dinner parties? Not true. Don’t try it. Really.