Citywire 1000: gold's top three performing managers revealed
We compare and contrast the strategies of the leading gold managers from Citywire 1000.
by Frank Talbot on Nov 19, 2012 at 10:38
The disconnect between the colossal gains in gold and the companies that mine and refine the element has been one of the most striking features in the investment world post financial crisis.
Over three years to the end of June this year gold equities rose a meagre 15.6%, compared to the highly impressive 79.6% gain in gold itself.
Despite the meagre returns in gold, this has not stopped active managers in the precious metals space delivering high levels of risk-adjusted returns.
The recently launched Citywire 1000 shows that it has been a good source of outperformance during that period with close to two thirds of all active managers beating their benchmarks. So who has done the best with investors’ money?
1. Fund manager: Fritz Eggiman
Fund: AMG Gold Minen & Metalle
A quick glance at the Citywire AAA-rated manager’s portfolio and it’s clear a lot of his outperformance has come from his significant stakes in bullion both gold and silver and healthy allocations to silver miners.
Specialist silver miners currently account for 17.2% of the fund, with a 4.5% stake in Mexico’s First Majestic Silver one of its biggest. The fund's top holding is a near 8% position in silver bullion itself.
Along with the global slowdown, one of the key factors in the disappointing equity performance of gold miners has come from their reluctance to reward investors with income.
However, that is a trend Eggimann has started to see change, with dividend payouts practises shifting and some even linking explicitly to the higher gold price itself. This has caused Eggimann to sell his direct gold holdings in favour of gold miners which now account for two thirds of the portfolio, compared to just 5% in the metal itself.
In terms of his geographical allocation he has a strong emphasis on Canadian producers. He has been underweighting the Australian based Newcrest mining, which has performed very poorly in 2012. Its absence from the top 10 will have significantly aided his performance.
2. Fund manager: John Hathaway
Fund: Tocqueville Gold
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