NEW YORK ( TheStreet) -- Gold, silver and real estate investment trusts are poised to extend gains this year as economic growth strengthens, said Michael Cuggino, manager of the Permanent Portfolio Fund (PRPFX).
The $10.3 billion mutual fund, which garners a full five stars from research firm Morningstar (MORN), has returned 15% over the past year, better than 98% of its peers. Over the past five years, the fund has returned an average of 9.6% annually, outperforming 99% over its Morningstar rivals.
Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.
What is your economic outlook for 2011?Cuggino: U.S. economic growth is getting stronger. We are seeing signs of that in a lot of data. Unemployment remains high, but I expect that to stabilize and eventually come down. I expect corporate profits to remain strong and I think fourth-quarter earnings will provide a good underpinning for stock prices going forward. What is your outlook for gold in the coming year? Cuggino: The macro-monetary environment for gold leads us to think we will see continued higher prices, with higher highs and higher lows. But we think there will be a lot of volatility along the way after the metal's big run-up last year. If you look at the monetary-supply issues out there and the liquidity being created around the world, it's most likely going to drive gold higher, even if it's a choppy ride. Silver outperformed gold in 2010. What is your expectation for 2011? Cuggino: Silver has some of the properties of gold in terms of being a store of value, but it's also an industrial metal. And with economic activity improving and investor demand increasing, supply is being constrained. So I see a continued move higher in silver as well. As to which metal will be the better performer, it does not make too much of a difference to us in the end because we own both. Real estate investment trusts, or REITs, had a fantastic 2010, impressing even their harshest skeptics. What is your forecast for this area of the economy? Cuggino: REITs are nicely leveraged to economic activity. A growing economy tends to result in higher rents. So we like REITs across a number of real estate sectors. We think warehousing and industrial REITs will be strong, as well as office REITs as vacancies decline. Some of the names we own in the fund are ProLogis (PLD) and Boston Properties (BXP). Names like these will fare well in the coming year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV