Having a tough year? Spare a thought for Ani Markova and Robert Lyon, managers of the Smith & Williamson Global Gold & Resources Fund. Its price has dropped 33% so far this year and 13% last year. Gold mining is out of favour and it has broad exposure to around 120 stocks of all sizes, and 60% in mid- and small-cap names. Two-thirds are gold miners, with the remainder precious metals and minerals miners.
The fund’s skew towards smaller firms means it was hit dramatically when the gold price tanked. Its second-largest holding is Tahoe Resources, a Canadian junior miner worth C$2bn. But this gives the fund a distinct profile, says Markova.
“The fund invests in companies with strong growth ideas and significant potential that exchange-traded funds (ETFs) and generalist funds tend not to invest in as they are mostly… in larger, slow-growing majors.” The emphasis on smaller companies could help the fund in the coming year, says Leonora Walters in Investors Chronicle. “As discoveries become smaller and lower grades limit production, larger mining companies may look to acquisitions to replenish reserves, especially while valuations are cheap.”
A gold price recovery could be on the cards, says Walters. Currency devaluation and demand from central banks due to inflation concerns could boost gold and there is a lack of supply. If you believe gold will bounce back then this is the fund for you. In the bull market it outperformed its peers, returning 73.8% in 2008 and 65.8% in 2009. The annual charge of 1.75% isn’t cheap, although an initial charge of 5% can be waived by buying through a fund supermarket.
Contact: 020-7131 4000.
| Smith & Williamson Global top ten holdings | |
|---|---|
| Name of holding | % of assets |
| Central Fund of Canada Cls A | 5.1% |
| Tahoe Resources Inc | 4.7% |
| Goldcorp Inc | 4.3% |
| Argonaut Gold Inc | 3.8% |
| B2Gold Corp | 3.4% |
| Regis Resources Ltd | 3.0% |
| Silver Wheaton Corp | 3.0% |
| Agnico Eagle Mines | 2.9% |
| Randgold Resources | 2.8% |
| Eldorado Gold Corp | 2.7% |