Gold May Be Glittering but Mining Stocks are Positively Blinding

Gold is up an impressive 27 percent so far in 2016, but gold miner funds are up multiples of that. Frank Holmes, portfolio manager for the U.S. Global Investors World Precious Minerals Fund (UNWPX) - Get Report , said the miners are shining because they have been neglected for so long. 'The miners had a four year bear market and used the time to slash costs,' said Holmes. 'Now you have revenue growth and margin expansion. And oil has come down too and that's a big input for mining companies.' The U.S. Global Investors World Precious Minerals Fund is up 149 percent so far in 2016, according to Morningstar. The $225 million fund has returned an average of 15.5 percent annually over the past three years, outpacing 98 percent of its peers in Morningstar's equity precious metals category. The fund sports a trailing 12 month yield of 4%, according to Morningstar. Holmes said when he evaluates mining stocks he looks for growth on a per-share basis in a trio of value drivers: production, cash flow and reserves. We really like the structure of royalty companies as well.