This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Fund Investors Can Spread Gold Bets

Stocks in this article: FKRCX INIVX GLD

To spread your bets, consider buying a mix of bullion and precious metals funds. To hold bullion, buy an ETF that owns gold, such as SPDR Gold Shares (GLD).

To own mining stocks, try a fund with a relatively steady long-term record. A top choice is Van Eck International Investors Gold (INIVX), which returned 17.1% annually during the past five years, outdoing 98% of peers.

The fund holds stocks of all sizes, including large established companies as well as smaller operations. Some holdings are in the development stage, which means that they have not yet begun selling gold.

Van Eck portfolio manager Joe Foster varies the mix. During periods when gold prices are sinking and mine profits are low, he sticks with blue-chips that have the wherewithal to survive. In bull markets, he owns smaller miners that can skyrocket as gold prices rise and investors worry less about risks.

Bullish on the industry, Foster currently has 30% of assets in small companies, a big position for the fund.

"The stock valuations are low, and the companies are generating tremendous earnings because gold prices are high," he says.

A favorite small-cap holding is Guyana Goldfields (GUY:Toronto), which is developing a mine in Guyana. Foster, who is a geologist, says that the ore is high-quality, and the company is proceeding smoothly to build roads and other infrastructure that will enable production to begin soon. A large-cap company that he likes is Goldcorp (GG). The company is reporting earnings growth, with operations in Canada, Mexico and Chile.

Another solid performer is Oppenheimer Gold & Special Minerals (OPGSX), which has returned 16.2% annually for the past five years, outdoing 90% of competitors.

The fund aims to find companies that can report increasing revenues. Although the portfolio includes some large stocks, Oppenheimer typically emphasizes small companies that can develop new finds and grow faster than Wall Street expects.

One holding is Extorre Gold Mines (XG), which is developing a mine in Argentina. "This is an excellent early-stage operation with higher-quality reserves than the market expects," says John Corcoran, Oppenheimer's client portfolio manager.

For a fund that excels in bull markets, consider Franklin Gold and Precious Metals (FKRCX), which returned 14.7% annually in the past five years and outdid 66% of peers.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs