How Gold Mines & Nuclear Power Plants Can Help Protect Your Wealth

 An investor may be able to reduce their risk without necessarily giving up his return, simply by owning assets that do not rise and fall at the same time. Gold mines, nuclear power and commodities are three such assets: each has compounded in dollars over the past decade, yet each has moved very differently from the world’s largest stock market. Historically, they  tend to hold their value when energy and food prices rise and interest rates climb, which is exactly, in our view, the winter the world may be heading into. The Marcellus Global Multi Asset Fund (GIFT fund), which invests via the Marcellus Global Wealth Builder Fund (Cayman fund), gains exposure to them through  alongside global equities and bond ETFs.

 

Exhibit 1: Correlation of daily returns with the S&P 500. Listed ETFs are used as proxies and are not Wealth Builder holdings; correlations vary with the period measured. Source: PortfoliosLab, 25 September 2026. See note [1]. Past correlations and returns are not indicative of future results

Harry Markowitz showed the world the power of low correlation

Picture two shops on the same street in Mumbai. One sells umbrellas, the other sells ice-cream. Each earns Rs 10.3 lakh a year. But the umbrella shop earns it in the monsoon and the ice-cream stall earns it in the summer, so whichever shop you own, your best month is seven times your worst.

Now own half of each. Your profit for the year is exactly the same, and the swings almost disappear.

Exhibit 2: Left, monthly profits of two hypothetical Mumbai shops, each earning Rs 10.3 lakh a year, and of an investor who owns half of each. Right, the value of Rs 100 earning 10% a year at two levels of volatility. Illustrative. Hypothetical; not based on actual investments. Source: Marcellus calculations.

That is Markowitz’s insight. What drives the risk of a portfolio is not only how risky each holding is, but whether the holdings move together. Take two assets that each return 10% a year with volatility of 20%, and split your money between them. If they move in lockstep, your volatility stays at 20%. If they are unrelated, it falls to 14%. Your expected return does not change.

Lower volatility is not merely more comfortable, it may help you avoid damaging fall.. Falls are expensive: lose 50% and you need a 100% gain simply to get back to where you started. Over twenty years, Rs 100 earning 10% a year with 20% volatility becomes roughly Rs 470. The same 10% a year with half the volatility becomes roughly Rs 610 (illustrative, assuming the same 10% average annual return in both cases) (Exhibit 2, right).

Owning assets that do not move together is the closest thing to a free lunch in finance(Harry Markowitz): you capture most of the return while reducing the risk.

Diversification

As Ray Dalio’s “Holy Grail” of investing explains, by adding ten to fifteen good, uncorrelated return streams, you keep the average return and substantially reduce the risk. In theory, risk falls with the square root of how many genuinely uncorrelated holdings you own.

Exhibit 3: Portfolio risk against the number of genuinely uncorrelated holdings, indexed to one holding = 100. Illustrative. Source: Ray Dalio, Principles (2017); Marcellus calculations

However, simply adding 50 Indian large caps with a good Sharpe ratio does not give you uncorrelated holdings. Even a beautifully built Indian portfolio is one country, one currency, one rate cycle and one political system i.e. meaningful single country concentration risk. On Exhibit 3, a concentrated Indian portfolio sits far to the left.

The answer: Diversifying across the world and across uncorrelated assets while seeking competitive long-term returns.

Real assets have historically had low correlation with the stockmarket

So where does an Indian investor find assets that zig when the stock market zags? Three of the real-assets held in the Wealth Builder Portfolio have had low to moderate correlation with the S&P 500 (Exhibit 1), and each has delivered positive US dollar returns over past decade (Shown below – Exhibit 4).

Exhibit 4: Value today of $100 invested ten years ago, in US dollars, with the annualised return. Proxies are the Global X Uranium ETF, SPDR S&P 500 ETF, VanEck Gold Miners ETF and Invesco DB Commodity Index Tracking Fund. Source: PortfoliosLab, 25 September 2026. See note [1]. Past performance is not indicative of future results. Reference to specific asset is not a recommendation.

• Gold mines. A gold mining company is not a vault; it is a factory. It digs ore out of the ground, extracts the gold and sells it at whatever the world price happens to be that day. Its costs are largely fixed, so when the gold price rises, a large part of increase can flow to the bottom line. The industry produced an ounce for about $1,785 in early 2026 and sold it for around $4,300 in September, which is why miners are earning record margins¹. It is to be noted that this operating leverage works in reverse when gold prices fall.
• Uranium and nuclear power. Nuclear plants supply about 9% of the world’s electricity, round the clock and whatever the weather. 439 reactors are running today, 79 more are being built and 31 countries have pledged to triple nuclear capacity by 2050, while mine supply still falls short of what reactors need. With the rising power demand in  artificial intelligence, data centres need power that never stops, and the hyperscalers have begun signing long-term deals directly with nuclear plants rather than waiting for the grid¹. Uranium-related equities can be highly volatile and sensitive to policy, regulatory and safety events.
• Commodities. Oil, copper, aluminium, wheat and the rest, held as a basket. These are the raw inputs whose prices are what inflation is made of, which is why they historically tend to rise when financial assets struggle. Over the past twenty years, a broad commodity basket has moved with the S&P 500 only about a third of the time¹

Each of these can stand on its own two feet. Held together, alongside global equities and bonds, they aim to do something more valuable: smooth the ride.

Real assets’ have historically held up well in rising inflation environment

Now let’s look at the winter we believe lies ahead. Three sets of prices are climbing at once:

Energy first. Conflict has flared again in the Gulf, where the US and Iran are trading blows around the Strait of Hormuz, and Brent crude settled above $100 a barrel. Ukraine’s strikes on Russian refineries have squeezed diesel. European gas is at its highest since late 2022, with inventories running low.

Then food. The UN’s food price index rose almost 2% in August. Cereals are at their highest since May 2024 and vegetable oils since June 2022, as Black Sea exports are disrupted and the closure of Hormuz pushes up the cost of fertiliser and freight.

Then the price of money. On 16 September the US Federal Reserve raised rates for the first time since 2023, to 3.75-4.00%, and 16 of its 18 policymakers expect at least one more increase this year. The European Central Bank has already raised once and signalled that rates may have to go higher2

That combination is hostile to conventional portfolios consisting only of financial assets. Real assets are built for precisely this weather: VanEck’s research shows that in the two most recent bouts of high inflation, the 1970s and the mid-2000s, commodities, gold and natural resource companies beat both stocks and bonds, and did so even in the quarters when the economy was shrinking2.

The reason is simple. A gold mine, a uranium deposit and a barrel of oil are scarce physical things, and inflation is what happens when money buys fewer of them. As David Schassler, who heads VanEck’s Multi-Asset Solutions team says, in periods of inflation “you have to own assets with embedded scarcity”²

In a winter of scarce real assets and abundant money supply, we believe it makes sense to own scarce things.

We have built a Global portfolio of diversified, low-correlated US dollar assets

Marcellus, in partnership with American ETF giant VanEck, brings you the Global Wealth Builder through its GIFT IFSC Category III AIF ‘Marcellus Global Multi Asset Fund’. VanEck acts as Model provider, providing model portfolio recommendations for the Global Wealth Builder. Roughly thirty ETFs, held in one globally optimised portfolio, following a steady, “Dravid style” strategy.

Exhibit 5: Allocation across the four sleeves. Weights approximate and will vary. Source: Marcellus Global Wealth Builder. See note [3]. Indicative allocation, subject to change without notice.

• Uranium and the nuclear fuel cycle, through fuel-cycle and technology leaders.
• Data centres, the landlords of AI: power, cooling and compute.
• Gold miners rather than gold, for operating leverage on the metal.

Developed & Emerging Markets high yield bonds, income streams no onshore platform offers.

Does it work?

We reviewed the hypothetical, back tested performance Global Wealth Builder on 3 fronts:

Exhibit 6: Source: Bloomberg/VanEck/Marcellus : Value of $100 invested on 1 March 2016, at 28 February 2026, in US dollars. See notes [4] and [5]. Wealth Builder figures are hypothetical and backtested, not actual Fund performance, and are before Fund-level fees.

The Nifty 500 TRI compounded at 12.79% against the Wealth Builder’s hypothetical, backtested 11.94% The VE data is net of fees) Even with Indian equities being one of the greatest runs in world markets, a globally diversified portfolio would have captured 93% of the return.

Front two: Volatility and Drawdowns

Exhibit 7: Source: Bloomberg/VanEck/Marcellus. See note [5]. Wealth Builder numbers are hypothetical, and backtested.

93% of the return, for 64% of the risk. Over the same decade the Nifty 500 TRI carried 19.3% annualised volatility against the Wealth Builder’s 12.4%.

Hypothetical Risk adjusted returns have been better

Exhibit 8. see notes [5] and [6]. Sources: ESPNcricinfo; Marcellus calculations. Wealth Builder numbers are hypothetical and backtested.

• Indian equity has been a good scorer of runs but a poor converter of risk into return. That is precisely what the Wealth Builder is built to fix.
• The Nifty 500 is Sehwag: more runs per innings, and impossible to plan around. The Marcellus Global Wealth Builder is Dravid: marginally fewer runs, far more of them you can count on.