This Day On The Street
Continue to site
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

How Fund Investors Can Spread Gold Bets

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 - Get Report). 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $123.65 0.00%
GG $20.15 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs