Rustad’s Big Personal Bet on Gold

Conservative Party of BC Leader John Rustad’s personal investments are almost entirely in gold, an unorthodox strategy associated with investors hedging against inflation or worried about economic collapse.

All MLAs are required to make an annual disclosure and are required to provide updates when there are material changes to their finances.

Besides cash, the only holding in the registered tax-free savings and RRSP accounts of 61-year-old Rustad and his wife, Kim Royle, is “Horizon Beta Pro Gold,” according to his most recent public disclosure statement filed with the clerk of the legislative assembly in June.

Outside the registered accounts, Rustad holds more of the gold fund, plus another listed as “Horizon Beta Pro Canadian Gold Miners ETF,” and shares in the mining company Wheaton Precious Metals, as well as guaranteed investment certificates and other term deposits. He also owns a woodlot licence in Isle Pierre and four parcels of land in northern B.C.

Rustad, who was unavailable for an interview, is within striking distance of becoming premier in large part thanks to business interests persuading BC United to suspend its campaign so the Conservatives could consolidate the anti-NDP vote.

Horizons BetaPro funds “are designed to provide market-savvy investors with leveraged, inverse, and inverse-leveraged exposure to various indices or commodities on a daily basis,” according to a message from Rohit Mehta, the president and CEO of Horizons ETFs Management (Canada) Inc., included in the interim report for one of the funds.

Several funds in the lineup aim to provide a return that’s double the change in price of the underlying assets, including ones that hold gold bullion and others that invest in mining companies, while others allow investors to bet on the price of assets dropping.

According to disclosure forms, Rustad’s wife bought into the gold fund on Dec. 7, 2023, and Rustad bought shares in it later that month. Since then Horizons’ main gold bullion fund has gained about 60 per cent.

Earlier this year CNBC reported that “doomsday preppers” had driven up the price of gold and silver, acquiring the metals along with food and water as they prepared for disaster.

The website Investopedia calls gold “a prudent way to diversify” a portfolio, and the “Doomsday Prepper’s Guide to Precious Metals” describes a concentration of under 10 per cent as “a reasonable hedge against inflation and economic instability” but warns that allocating more than that should be done with great caution.

While disclosure forms list what assets MLAs hold, they do not say how much money they have either in total or in any particular investment.

Past filings show that as recently as June 2023, Rustad’s and his wife’s registered accounts held only cash, and that they have bought and sold precious metal assets going back to at least 2009.

They haven’t always profited. For six months in 2022 they were heavily concentrated in Horizons BetaPro Silver ETF, a period when shares in the fund lost 15 per cent.

In March 2020, during the early days of the COVID-19 pandemic, they bought shares in Barrick Gold and in the Horizons BetaPro Canadian Gold Miners ETF.

They sold Barrick at the end of July that year when it had bounced back to about double its pandemic low. It is unclear from the public record when they sold the Canadian gold ETF, about a quarter of which is itself invested in Barrick, but by May 25, 2021, it was no longer included on Rustad’s annual disclosure form.

BC NDP Leader David Eby’s most recent public disclosure statement says his RRSP, RESP and tax-free savings account investments are all in accounts where “prior advice and contents of portfolio [are] not disclosed to the Member.”

The statement lists no investments for his wife, Cailey Lynch, a family doctor who completed medical school in the last few years, but says she owes repayment for student loans.

BC Green Party Leader Sonia Furstenau lists GICs and “PH&N Pension Trust,” a balanced fund of bonds and stocks, as investments. Her husband, Blaise Salmon, holds units in two exchange-traded funds that use an environmental, social and governance lens to choose investments, as well as in the Danish company Vestas Wind Systems.

Aside from the current concentration in gold and silver, Rustad’s past disclosures show he and his spouse have occasionally dabbled in other stocks.

Rustad, who during the election campaign has promoted adding nuclear energy to the province’s mix, bought shares in uranium mining company Cameco Corp. on June 13, 2023. His wife bought shares in the same company on Sept. 5 that year.

Both sold their shares in Cameco on Oct. 23, 2023, when the stock was around $52.36, giving Rustad about a 25 per cent return and his wife a small profit. Since the couple sold, they missed substantial gains as Cameco closed Friday at $70.64 after spiking as high as $76.66.

In 2021 Rustad and his wife bought shares in the Bank of Montreal, then sold them about three weeks later for a small gain. That year they also bought shares in the pipeline company Enbridge, then sold at a small loss after six weeks.

Whoever wins the Oct. 19 election will oversee a provincial government with an operating budget of $90 billion a year.

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