Regardless of how the gold price performs in the short term, the yellow metal is only heading one way in the long term, says John Wong, lead manager of the Golden Prospect Precious Metals fund (LSE: GPM). Speaking to Shares magazine, he points out that sovereign debt crises and currency woes are far from over. That means gold will soon be on the up again.
His views are supported by the fact that his investment trust has posted a 31.6% gain over the past year, and a 179.3% gain over five years. “The fund is designed to capture a lot of the upside from the movement of precious metals, mainly gold and silver,” says Wong. He rejects suggestions of a gold-price bubble, calling the price “fair”. “I am very relaxed onvaluations right now… today I can buy at prices I have never seen in ten years playing in the gold space.”
Run by Wong at New City Investment Managers, the fund has 38 holdings and assets of £49.6m. As The Independent notes: “Thus far, the fund has done rather well, with its net asset value up by nearly 250% in the period running from the start of 2009 to the start of September this year, outperforming the gains in the gold price in sterling terms.”
Singer analyst Charlie Long, also quoted in The Independent, describes Golden Prospect as a “superb way” of harnessing the expected rebound in gold equities: “Gold equities, once regarded as a geared play on the gold price, continue to underperform physical gold… We believe that sustained high gold prices will result in substantial cash generation for producers and a sector re-rating.”
Contact: 020-7201 6900.
Golden Prospect Precious Metals holdings
| Name of holding | % of assets |
|---|---|
| Silver Wheaton | 10.8% |
| Fresnillo | 6.4% |
| Ausgold | 6.1% |
| First Majestic | 5.2% |
| Perseus Mining | 4.8% |
| Source: New City Investment Managers | |