Gold equity funds outperform rising gold price
Gold mining funds got a ray of sunshine last month although a single boost to returns is too fleeting to call a turnaround just yet, Hargreaves Lansdown says.
In January seven of the top 10 performing funds on the firm’s platform were gold equity funds.
Hargreaves Lansdown head of VCT research Richard Troue says the prevalence of gold funds is due to tightening fiscal discipline among natural resources companies.
That has pushed their values higher despite the gold price remaining depressed.
“Shares in gold mining companies have staged a mini-resurgence following a torrid 2013 where the gold price and earnings fell as investor sentiment towards the sector was highly negative,” Troue explains.
“It is too early to call a turnaround in the fortunes of these companies, but many have worked hard to reduce costs and changes in management at the top level have seen a greater focus on shareholder returns,” he says.
“In January we saw gold mining companies recovering faster than the gold price. If companies can start to deliver earnings growth in 2014 and 2015 the share price recovery could continue.”
Top performing funds in January 2014
|2||WAY Charteris Gold Portfolio||Specialist||15.11%|
|3||BlackRock Gold & General||Specialist||10.04%|
|4||Old Mutual Blackrock Gold & General||Specialist||10.01%|
|5||Investec Global Gold||Specialist||9.76%|
|6||Smith & Williamson Global Gold & Resources||Specialist||8.83%|
|7||AXA Framlington Biotech||Specialist||8.51%|
|8||CF Ruffer Baker Steel Gold||Specialist||8.25%|
|10||MFM Techinvest Special Situations||UK Smaller Companies||7.66%|