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.