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Waratah Capital Advisors Ltd. is betting on gold to lift its returns this year as investors pile into the asset to shelter their wealth during the global trade war.

“We now live in a world that is losing faith in the US dollar,” Co-Founder Brad Dunkley said in a letter to investors seen by Bloomberg News. “Central banks and ordinary citizens, particularly in India, China and developing markets, have increasingly turned to gold to preserve their purchasing power.”

Dunkley said he expects gold will “do much of the heavy lifting” for the firm’s funds in 2025. Still, two flagship funds, Waratah One and Waratah One X, lost 3.3% and 5% in the first quarter, respectively. The firm’s long-biased fund gained about 2% and its thematic fund climbed 4.5%.

Waratah, founded in 2010 by Dunkley and Blair Levinsky, manages about C$3.8 billion ($2.8 billion) for wealthy individuals, family offices, foundations and pension funds. The long-biased fund, which is named Waratah Special Opportunities and is managed by Dunkley, has produced average annual returns of more than 11%.

Gold has surged to new records this year as investors and traders take a dimmer view of the US dollar amid President Donald Trump’s shifting trade and economic policies. The price of gold touched $3,500 for the first time last month, and the metal’s value is up by more than 45% over the past year.

Toronto-based Waratah expects the prices of copper, natural gas, and electricity to continue rising as the use of artificial intelligence proliferates, but remains skeptical that AI processing will ever be a good business. “There are just too many competitors lacking meaningful differentiation,” Dunkley wrote.

“The trillions of dollars being spent on quickly depreciating capital reminds me of the rollout of high-speed fiber optics: consumers and businesses are going to be the beneficiaries, not the capital spenders,” he said.

Waratah’s long-short equity fund, which has C$247 million in assets as of the end of February, increased its exposure to Canadian stocks — particularly engineering and construction companies — ahead of the country’s April 28 election. The firm expects higher infrastructure spending — a promise made by Prime Minister Mark Carney — as Canada responds to tariff threats, portfolio manager Jason Landau wrote in the same letter.

Other stock holdings include Nexgen Energy Ltd., a Canadian company with assets in Saskatchewan that has the potential to become a large uranium producer. The company is awaiting its final federal permit, which Landau said may be expedited after the election.

(By Layan Odeh)