The best-performing of these – CF Ruffer Baker Steel Gold – is up 14.38 per cent so far this year, meaning that it has almost regained half of the losses it sustained in 2011.
Investec Global Gold, MFM Junior Gold and BlackRock Gold & General have all regained more than half of what they lost last year. SF t1ps Smaller Companies Gold has the worst record of the seven funds in both 2011 and 2012, with losses of 38.97 and gains of 7.62 per cent respectively.
Performance of funds in 2012 and 2011
| Name |
2012 returns (%) |
2011 returns (%) |
| CF Ruffer - Baker Steel Gold |
14.38 |
-32.48 |
| MFM - Junior Gold |
14 |
-27.97 |
| WAY - Charteris Gold Portfolio Elite |
13.63 |
-28.51 |
| Smith & Williamson - Global Gold & Resources |
12.63 |
-27.04 |
| Investec - Global Gold |
10.65 |
-20.83 |
| BlackRock - Gold & General |
9.74 |
-18.47 |
| SF - t1ps Smaller Companies Gold |
7.62 |
-38.97 |
Source: FE Analytics
Natural resources funds with a significant exposure to gold and assets highly correlated to the precious metal have also bounced significantly this year. JPM Natural Resources, First State Global Resources and Baring Global Resources are all up over 10 per cent, while First State Global Agribusiness has regained 59 per cent of the 13.98 per cent it lost in 2011.
Gold equities suffered a disappointing period in 2011. In spite of high volatility in the price of the metal last year, it rose in value over the course of the 12 months. However, gold mining companies’ high correlation to equity markets – which suffered across the board last year – and the impact of costs dealt a big blow to gold-focused funds.
However, gold equities have rallied so far this year on the back of a strong gold price and rising markets.
Performance of index over 5-yrs
Source: FE Analytics
ETF Securities analyst Martin Arnold, who said last week that he expects the gold price to continue its upward trend in the long-term, believes gold equities are the asset class to look out for in 2012.
"It’s a misconception that gold only does well when equities do badly – just look at 2009," he said.
"There’s no question that gold equities look extremely cheap on a relative basis."
Arnold says the same stimulators that led to the gold equities rally in the aftermath of the Lehman crash are now in place.
"Quantitative easing results in a weaker dollar, which is always a good sign for gold, but it also makes borrowing cheaper which tends to have a positive impact on companies," he explained.
According to FE Analytics, the average gold fund in the IMA unit trust and OEIC universe returned 62.7 per cent. In 2010, the average fund delivered 65.3 per cent, including SF t1ps Smaller Companies Gold which was up more than 114 per cent.