Gold funds shine as the precious metal and mining stocks bounce back

3rd March 2014

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Funds that invest in bullion and gold mining shares were the best performing funds of February with the top portfolio delivering a 17% return over the month writes Philip Scott.

According to data from fund broker Hargreaves Lansdown, six of the top 10 funds over the month were gold specialists.

The best fund for the month was the Junior Gold Trust. The portfolio, which specialises in investing primarily in small to medium sized companies which focus on identifying and extracting gold, delivered a robust 17% February.

Coming in second place was WAY Charteris Gold Portfolio, up 13% and achieving 11% apiece for the period were Smith & Williamson Global Gold & Resources and CF Ruffer Baker Steel Gold.

One of the sector’s most popular funds, BlackRock Gold & General returned 10%, while Investec Global Gold achieved 9%.

Outside of gold mining funds, European funds also fared well, with FP Argonaut European Alpha up 10% and Cazenove European Income, 9% better.

Adrian Lowcock, senior investment manager, at Hargreaves Lansdown says:  “Gold miners led the way in February, continuing their recovery which began in January. Whilst it is still too early to suggest the recovery in gold miners is sustainable, there are some positive signals.”

“The gold price seems to have stabilised, companies have changed senior management, reduced costs and improved their focus on shareholder returns.  This focus on cutting costs and improving returns should feed through to profitability in the next few years.”

After gold’s disastrous 2013, last month saw the precious metal gain some traction on the back of its safe haven appeal as investors ploughed into the commodity following the news that the unseasonal cold weather hit US retail sales hard in January while the amount of people claiming unemployment benefits also rose in early February.

Since the start of the year, the price of gold is now up by more than 11% and is currently trading at circa $1,344.59 per ounce.

 February’s top performing funds

Name IMA %  
Junior Gold Ret Specialist

16.87

WAY Charteris Gold Portfolio WAY R Acc Specialist

13.28

Smith & Williamson Global Gold & Resources Inc Specialist

11.34

CF Ruffer Baker Steel Gold O Acc Specialist

11.05

FP Argonaut European Alpha GBP A Acc Europe Excluding UK

10.18

BlackRock Gold & General A Inc Specialist

10.16

Newton UK Opportunities GBP Inc UK All Companies

10.11

Premier Ethical A Net Inc UK All Companies

9.53

Cazenove European Income B Acc Europe Excluding UK

9.23

Investec Global Gold A Acc Net Specialist

8.57

Source: Lipper, 31st January 2014 to 28th February 2014

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