Tilney has halved exposure to physical gold across its central strategies, including its Multi-Asset Portfolio range.
The management group revealed in place of gold it has increased its positions in short-dated US Treasuries in response to normalising fixed income markets.
Ben Seager-Scott, chief investment strategist at Tilney, said the gold trade, which the group initiated at the end of 2015, had “served portfolios well.”
He explained: “With the investment landscape changing, it seems appropriate to review these positions, and begin taking profits.
“The gold positions effectively substituted for distorted fixed income markets which are now close to normalising in the US.”
Mr Seager-Scott added: “US Treasuries appear to have regained the characteristic of a key risk-off trade. Additionally, normalising interest rates in the US increases the opportunity cost of holding gold as a non-yielding asset.
“With gold having done its job, now we can start returning to a more traditional footing.”
Mr Seager-Scott said it had boosted its positions in short-dated US Treasury inflation-protected securities, on the basis these will “offer some portfolio protection during risk-off periods”.
“In the meantime, we anticipate a decent real return from the carry, and with breakevens close to the 2 per cent target, the potential for protection against upside inflation risk is attractive,” he added.
The asset allocation changes will apply to the seven Multi-Asset Portfolio funds, which include Maximum Growth, Aggressive Growth, Growth, Income and Growth, Income, Conservative and Defensive.
Joshua Gerstler, financial adviser and company director at The Orchard Practice, said he considered gold to be "a speculation, not an investment", and confirmed he did not have any clients invested with Tilney.
"Shares should provide you with dividends and property should provide you with rental income. Gold provides you with nothing," he added.
"When you buy gold you are doing so in the hope that someone will buy it from you in the future for more than you paid for it. It is a punt."