View more on these topics

Going for gold

Merrill Lynch gold and general fund manager Graham Birch believes that the gold price will continue to rise although he also quite rightly thinks that there is much more money to be made by investing in shares in gold mining companies rather than the precious metal itself.

Gold shares generally do well in two circum-stances. First, when the demand for gold exceeds supply and, second, when there are major political and economic disasters.

Birch aims to make a profit from firms which are best at mining gold economically and from shares in countries which have less taxation and political risks than others.

Most countries where gold is mined are in the emerging category such as South Africa, Peru and Russia. But, contrary to expectations, only 18 per cent of the funds is invested in African shares.

In fact, at present, around 37 per cent of the fund is invested in US equities and around 19 per cent in Australasia.

The biggest holding is in Newcrest, an Australian producer, which makes up around 9 per cent of the fund. Another big holding is Minas Buenaventura which, together with Newmone Mining, based in Denver, controls the world’s biggest gold mine, called Yanacocha. This mine spreads across more than 60 miles of Peru at altitudes of up to 14,000ft and has already produced 7bn-worth of gold.

Birch does not only invest in gold. At present, he is excited about rho- d-ium. Non-gold shares make up around 20 per cent of the fund. The demand outlook is good, especially in China, where it is outstripping supply.

This fund is speculative but Birch knows what he is doing and to me it is the safest way of investing in gold. The fund is up by 102 per cent over five years to last December.

Recommended

Correspondent’s week

This week by former editor of Money Marketing and managing director of himself, Steve McDowell

Henderson appoints head of investment sales

Henderson Global Investors has appointed Mike Wilson as head of investment trust sales to discretionary investment managers.Wilson’s role is to increase the ownership of Henderson investment trusts amongst discretionary investment managers in the UK, Channel Islands and the Isle of Man. Wilson has been director of retail strategic alliances at Invesco Perpetual and more recently […]

Upping the anti

2006 is likely to see the introduction of further anti-avoidance measures

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Pension freedom: wish you were here?

Out there lies a warm ocean of desert islands, sun, sand and palm trees, where individuals can choose how and when to tax-efficiently access their pension fund and realise the retirement dreams they have worked so hard for.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com