BOSTON ( TheStreet) -- Gold funds surged an average of 38% this year, about 2 ½ times the pace of the benchmark S&P 500 Index, as the precious metal reached a record.Gold is a popular investment in times of economic and political uncertainty. Since many countries in the developed world are running huge deficits and printing money, and there is a long-running war in the Middle East and the threat of one in Korea, gold has extended a rally that bodes well for the sector in 2011, analysts say. Investing in mutual funds that buy gold-company stocks is a way to reduce risk in the highly volatile sector. Problem is, only a handful of funds produce relatively consistent returns. Also, the price of gold itself is up 19% this year, half that of the average precious-metals fund, which mostly hold gold-related stocks instead of the commodity itself. Gold traded around $1,383 an ounce this week after hitting a record $1,432.50 on Dec. 7. In July 1997, gold sold for $319 an ounce, its lowest price since December 1985. Morningstar analysts are using a long-term gold-price assumption of $1,366 per ounce in their gold-stock analysis models, which corresponds to Comex gold futures contracts, a widely accepted barometer of gold prices. Four funds with excellent long-term records and their holdings follow, as well as a new mutual fund that's the top performer this year.