When gold prices were around $300 in 2001, the fund emphasized large companies.
"Starting up a new mine is a risky proposition, and there isn't much room for error when prices are low," says portfolio manager Stephen Land.
As prices topped $400 in 2005, mine profits climbed, and Franklin began shifting to smaller stocks. This year, up to 25% of assets were in development companies that had not started production.
A holding is Osisko Mining (OSK:Toronto), which is developing a property in Canada. "When the development is completed, this will be the biggest gold mine in Canada," says Land.Readers Also Like: >> Governments Take Aim at Gold Miners' Pockets >> None of Your Mutual Funds Are Making Money