What are we looking for?
Leaders and laggards among funds that invest in precious metals equities, bullion or gold and silver futures.
Investors have pushed up gold and silver prices largely because they see the metals as a hedge against inflation and debasement of currencies.
Central banks in the United States, Europe and Japan recently announced bond purchases – essentially more money printing – to boost their struggling economies.
We looked for the eight best- and worst-performing funds from Aug. 1 to Sept. 19 in the precious metals, commodity and alternative strategies categories. U.S. dollar, segregated and duplicate versions of funds were excluded.
What did we find?
Silver looking like the new gold – at least in the short term.
Precious metals stocks have come to life recently after lagging bullion prices in recent years. And Sprott Silver Equities, the only mutual fund investing in silver securities in Canada, was shining the brightest with a stellar 35.6-per-cent gain over the seven weeks.
The fund has enjoyed a nice pop thanks to a surging silver price, which gained nearly 25 per cent over the period versus a 10-per-cent climb for gold. Big movers in the fund included names such as Silver Wheaton, Pan American Silver, Allied Nevada Gold, Coeur d'Alene Mines and First Majestic Silver.
“You have seen them [equities] play a bit of catchup to where they should be,” suggested Charles Oliver, who co-manages the fund with Eric Sprott at Sprott Asset Management.
“The equities are still incredibly cheap.”
Silver stocks have run up over the short term, but they are still flat since the start of the year, while bullion prices have risen, said Mr. Oliver, who also runs Sprott Gold and Precious Minerals fund.
“So I still see more upside.”
Precious metals equities and bullion have been rebounding after European Central Bank president Mario Draghi unveiled a rescue plan to deal with the euro-zone debt crisis by buying up unlimited amounts of bonds in the peripheral countries, he said.
“The thing that was putting fear into all the portfolio managers was what was going on in Europe, and the potential for it to come apart. …As long as Germany does not come out and derail what is going on in Europe, you'll see equities continue to rally.”
Precious metals equity funds outpace bullion peers from Aug. 1 to Sept. 19, 2012
|Fund||MER||Assets (in $ mil.)||% chg. (Aug. 1-Sept. 19)|
|Sprott Silver Equities Class-A*||2.82||12.8||35.55%|
|BMO Junior Gold Index ETF||0.62||99.2||28.94%|
|Sentry Precious Metals Growth||2.72||589.7||28.85%|
|PowerShrs. Global Gold/Prec. Metals Cl A||2.06||5.8||28.16%|
|CIBC Precious Metals||2.48||96.4||27.33%|
|Sprott Gold and Precious Minerals||2.93||438.5||27.00%|
|IG MK Global Precious Metals Cl-A||2.76||122.0||25.63%|
|Mackenzie Univ Precious Metals||2.53||396.4||25.38%|
Source: Lipper, Bloomberg
|Fund||MER||Assets (in $ mil.)||% chg. (Aug. 1-Sept. 19)||YTD % chg. to Aug. 31/12||Calendar yr. rtns. 2011||2010||2009||2008||1 year to Aug. 31/12||3 years to Aug. 31/12|
|Sprott Silver Equities Class-A*||2.82||12.8||35.55%||n/a|
|BMO Junior Gold Index ETF||0.62||99.2||28.94%||-12.67%||-27.95%||-35.25%|
|Sentry Precious Metals Growth||2.72||589.7||28.85%||-8.82%||-23.09%||78.52%||85.38%||-37.14%||-27.81%||18.55%|
|PowerShrs. Global Gold/Prec. Metals Cl A||2.06||5.8||28.16%||-8.71%||-20.23%||28.08%||-27.60%|
|CIBC Precious Metals||2.48||96.4||27.33%||-14.84%||-35.32%||66.95%||63.11%||-41.96%||-29.51%||5.73%|
|Sprott Gold and Precious Minerals||2.93||438.5||27.00%||-17.89%||-31.32%||74.73%||113.82%||-49.63%||-37.19%||11.19%|
|IG MK Global Precious Metals Cl-A||2.76||122.0||25.63%||-16.43%||-16.77%||45.06%||63.87%||-31.91%||7.75%|
|Mackenzie Univ Precious Metals||2.53||396.4||25.38%||-15.69%||-17.48%||46.62%||66.83%||-46.10%||-31.56%||8.29%|
|Sprott Gold Bullion Fund-A||1.10||261.0||7.16%||3.92%||11.19%||21.38%||-7.69%||15.64%|
|BMG Gold Bullion Fund-A||3.06||127.7||7.24%||-0.67%||10.65%||14.95%||-11.01%|
|Mackenzie Univ Gold Bullion Cl A||2.61||112.9||7.24%||2.48%||8.44%||-9.60%|
|iShares Gold Bullion (Non-Hedged)||0.56||37.5||7.65%||1.12%||-8.75%|
|Horizons Gold Yield ETF**||n/s||64.6||8.03%||6.88%||5.21%||-6.92%|
|Horizons COMEX Gold ETF||0.71||13.1||10.13%||6.43%||8.40%||26.83%||-9.77%||18.51%|
|iShares Gold Bullion (CAD-Hedged)||0.55||538.3||10.34%||4.60%||10.93%||26.58%||-9.68%||16.68%|
|BMO Precious Metals Commod. Index ETF||0.76||5.4||12.00%||6.72%||-13.14%|
|S&P/TSX Total Return||7.42%||1.88%||-8.71%||17.61%||35.06%||-33.00%||-3.60%||6.10%|
|S&P 500 Composite Total Return Idx($Cdn)||3.34%||10.07%||4.42%||9.35%||8.08%||-21.92%||18.94%||9.68%|
- Claymore Investments, Inc.