17 MAR, 2022
By Constanza Ramos
Investing in gold is one of the favorite strategies for investors around the world. We wanted to analyze the best current options available when it comes to investing in gold (funds distributed in Spain to invest in Gold), as Its value changes in relation to the metal’s demand and offer, but also in relation to the gold as an active. Considered a safe haven asset, it becomes the investors’ star in moments of inflation or market crisis, because it has a reverse relation with interest rates. Its price is usually much more steady than other activities.
The Covid-19 crisis has reinforced this tendency and the number of investors deciding to put their assets into this commodity, investing in gold has increased. Furthermore, investing in this commodity represents an important role within the investment portfolio, from a strategic perspective.
The evolution of the price of gold since 2020 had shown some ups and downs, and with the current situation of the markets, commodities like gold, could be an interesting investment opportunity.
Looking at the above numbers we wanted to see if it is a good moment to invest in gold, as well as what are the best investment opportunities that this yellow metal can offer – How have been the funds that invest in gold affected by the latest events such as the current war in Ukraine and the high inflation?
This ranking only considers funds in the Gold and Precious Metals Sector Equity category at MorningStar.
Fund Manager: Christophe Foliot and Adeline Salat-Baroux
This fund was created in 2010. The objective of the fund is to outperform the benchmark, the FTSE Gold Mines Price Index, by investing primarily (at least 70% of net assets) in the gold exploration, mining, processing, and/or trading sector. Its volatility is 34.93% and it has a Sharpe ratio of 0.67.
Fund Manager: Not Disclosed
This fund was created in 2003 and its objective is to increase the value of its investment over the long term. The Sub-Fund invests a minimum of two thirds of its available capital (net assets) in a portfolio of shares of companies active in the exploration, production, processing, transportation and distribution of energy products (oil, gas, electricity, coal, etc.) as well as in shares of companies providing services and equipment to the oil industry. In order to take advantage of or hedge against market fluctuations, or for the purpose of efficient portfolio management, the Sub-Fund may use derivative instruments. The Sub-Fund is intended for investors who understand the risks of the Sub-Fund and wish to invest for a minimum period of 5 years. Its volatility is 39.76% and it has a Sharpe ratio of 0.69.
Fund Manager: Stefan Breintner
Gold: Inflation anchor and crisis currency by Dr. Maike Kolbeck
Gold can contribute significantly to the stability of a portfolio. As soon as the markets switch to crisis mode, many investors start looking for a “safe haven”. The trigger – whether a bank quake, financial crisis, pandemic or war, to recapitulate only the past 15 years – is almost secondary. Gold is considered the first choice. This is because the precious metal is characterised by properties that, taken together, make it unique: It is relatively rare, durable, cannot be produced artificially and can be lent on and thus serves as a store of value.
DJE – Gold & Resources: Actively exploits opportunities in the precious metals and commodities markets
The DJE – Gold & Resourcen is a thematic global equity fund. The concentrated portfolio of 50-70 stocks focuses on companies involved in mining, processing and marketing of gold. Equities from a broader commodities universe, such as diversified mining companies, non-ferrous metals, oil and gas are added for diversification. The benchmark-agnostic strategy can dynamically adjust its exposure to gold mining stocks between 30 – 100%. With gold as the investment focus, the fund has very attractive correlation characteristics to traditional investment strategies.
The thematic global equity fund focuses on gold and precious metals equities, diversified commodity producers, base metal producers, chemical companies and oil & gas producers. The fund pursues a benchmark-agnostic bottom-up approach with high-quality stock selection, focusing on the fundamentals of the companies as well as the business cycle of mining companies and oil & gas producers. Debt-free producers with a competitive cost structure that can generate free cash flows even at lower commodity prices are preferred.
Fund Manager: Steve Land and Frederick Fromm.
This fund was created in 2010. The objective of this fund is long-term capital growth by investing primarily in publicly traded equity and equity-linked securities that qualify as marketable securities, worldwide including emerging markets. Its volatility is 34.81% and it has a Sharpe ratio of 0.62.
Fund Manager: Charlotte Peuron and Aloys Goichon.
By Charlotte Peuron and Aloys Goichon
CM-AM Global Gold is a precious metals producers fund. It’s an equity fund. Generally speaking, we invest between 70% to 80% in gold producers and we have some diversification in silver, and platinum group metals producers. We have also a strong position in royalties/streaming companies. We classify the companies into 4 categories according to their production volume, the number of mines, and risk level.
We are stock pickers. To select companies we conduct a dual financial and extra-financial analysis. This allows us to fully understand and measure all risks. All the mines of each company are analyzed:
They all have an impact on production volumes, production costs, investments to be made… and therefore the profitability of projects. Of course, we are also focusing on the management track record. Good execution of the project (on time, on budget…) means better returns for stakeholders and shareholders. Of course, we include country risk (tax, mining code…) and security risk into our analysis.
To build the portfolio, the weight of each company depends on the totality of these risks and opportunities identified during this double analysis, and the potential return of the stocks. Our portfolio is concentrated, we can own between 40 to 60 companies, 45 today.