NEW YORK ( TheStreet) -- Investors who hold gold to shield their portfolios from accelerating inflation now wish they were alchemists. Seven of the 10 worst-performing equity mutual funds in January track mining shares.
The Rydex Series -- Precious Metals Fund ( RYPMX) tumbled 13% last month, bringing its 12-month gain to 29%. Top holdings include Freeport McMoRan Copper & Gold ( FCX), Newmont Mining ( NEM) and Barrick Gold ( ABX). Last Friday's jobs report showing unemployment fell to 9.7% in January from 10% in December has the gold bugs in a tizzy. Turning the corner on jobs -- and the economy -- has reduced the fear-based premium that was supporting the price of gold. After hitting a high of $1,217 an ounce in December, the spot price of gold has plunged to around $1,060. Losing almost as much, GAMCO Gold Fund ( GOLDX) dropped 12% on large positions in Randgold Resources ( GOLD), Goldcorp ( GG) and Agnico-Eagle Mines ( AEM). The only energy mutual fund among the worst performers, Guinness Atkinson Funds -- Alternative Energy Fund ( GAAEX) lost 12% of its value in January. The mutual fund is allocated to 48% solar, 28% wind, 10% efficiency, 7% geothermal and 5% hydro-electric. The Alternative Energy Fund returned 28% over one year on the premise of surging global energy demand, limited production capacity, rising costs and a renewed focus on caring for the environment. The tepid global economy and ample supply of crude oil, along with strength of the U.S. dollar, put a lid on crude-oil prices making alternative-energy sources seem less viable.