It looks to grow investors’ cash by investing in mining firms, precious-metal focused companies and resource groups. Its top-10 holdings include gold fund favourites Fresnillo and Barrick Gold, but also more unusual holdings such as miner SEMAFO and gold producer B2GOLD.
It has been increasingly popular with investors keen to cash in on the ever-rising gold price, but performance has dipped of late.
Performance of fund vs index over 3-yrs
Source: FE Analytics
Over three years the fund has beaten the gold spot price by more than 50 per cent, but over one year it has had a low correlation to the price of the precious metal, and has lost more than 6 per cent.
Gold equities have historically had a strong correlation to the gold price, but there has been a disparity of late. Companies have lagged the yellow metal by more than 30 per cent in the past 12 months, indicating that equities are ready for a rally.
Investors do need to keep the high volatility of the fund in mind: our figures show it has a volatility of 26.5 per cent over the past 12 months, compared with 19.8 per cent from the S&P GSCI Gold Sport price.
Performance of funds vs index over 1-yr
Source: FE Analytics
Alternatives for investors include the high profile BlackRock Gold & General and CF Ruffer Baker Steel Gold funds, but, again, both have lost money in the past year.
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