The manager trimmed her exposure to the precious metal early last year as she felt it was overvalued, and she proved to have made the right call as its price subsequently slumped. She now feels a number of factors have turned in its favour, however.
"Silver was quite volatile in 2011 but we are now optimistic that it will go through a period of consolidation," Markova said. "Its price has the opportunity to outperform gold in the short-term due to a combination of investor demand and industrial uptake. It is replacing lead as a solder for assembling electronic components and it is also being used in a number of medical devices."
Performance of indices over 1-yr
Source: FE Analytics
Our data shows silver has underperformed gold over the past year. It spiked sharply in April 2011 before slumping in the late summer.
Markova also tips diamonds to do well this year due to a structural shortage of high-end stones and strong demand from India and China. Away from precious metals, however, she is less optimistic about natural resources.
"We are more cautious on basic materials this year, as we are concerned about the high oil price acting as a headwind to global growth," she explained.
"As a result we are taking profits on copper even though we are positive on its long-term prospects, due to its use in machines such as cars, fridges and air conditioning."
One area of the natural resources market that Markova is still positive on is mineral sands, which she says a lot of people don’t understand.
She added: "There are small pockets of operational companies in this area. There have been a few years of natural shortages and volumes have been well managed to protect the price."
"One company we love is called Iluka, which mines titanium oxide, for use in paint tint, and zircon, which is used in white tiles and has some applications in toothpaste. Iluka is one of the few miners to have discipline – there is no secondary market for its products and it can massively increase production at a moment’s notice. Iluka currently has a 6 per cent dividend yield but we expect it to start paying a dividend of 10 per cent soon."
Performance of manager since joining fund vs peer group
Source: FE Analytics
According to FE Analytics, Ani Markova has returned 12.88 per cent since being appointed co-manager of Smith & Williamson Global Gold & Resources in May 2010, compared with 3.42 per cent from her peer group during this time.