Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at

Trust Insider: gold minnows for a mining recovery

by James Carthew on Feb 25, 2014 at 00:01

From launch to the end of January 2014 ARC’s NAV has fallen by 17.6% (and investors who came in at the second and third fund raisings will have done even worse) but this performance is a lot better than the FTSE Gold Mines Index (off 44.1%) and the S&P/TSX Gold Index (off 38%) so it seems as though the managers have done a good job.

What is more interesting though is that, since launch, the gold price is up 34%, even after the falls of the past couple of years – the inference must be that junior mining stocks are very much out of favour. 

ARC is managed by Altus Capital. The individuals involved in managing the fund had not managed a fund before ARC was launched but they had plenty of experience as geologists, corporate financiers and managers of junior resource companies.

They called both the rally in the gold price and the likely duration of it, predicting in the prospectus that the gold price would rise for a couple of years.

Focus on developing companies

They also drew attention to the dearth of capital available in 2009 to finance the ambitions of the exploration companies and decided to focus on companies that had production or were in their development phase and had reasonable chance of attracting capital to finance their projects.

That stance has been relaxed a little since but only 17% of the fund was invested in exploration companies at the end of January 2014.

At the end of January there were 24 holdings in the portfolio. The top 10 accounted for just over half the fund – this is invested in precious metals companies, with the bulk of that in gold. But it also has exposure to uranium (4%), bulk minerals (around 16%), base metals (13%) and diamonds (over 6%) plus 6% in cash. There is quite a big exposure to Africa (over 40%).

One unusual feature is a holding in an open-ended fund run by the manager, which accounts for 7% of the portfolio. The manager rebates the underlying management fee on this investment.

The annual management fee is 0.85% on net assets with a minimum fee of £150,000 and Nimrod Capital, who launched the fund and acts as an adviser, also get 0.15% per annum.

Sign in / register to view full article on one page

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home

As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

The Citywire guide to investment trusts

Investment trusts have proved to be a highly effective way to invest in the market. Citywire has interviewed the experts to find out more.

Investing for income in a changing environment

With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

More about this:

Look up the investment trusts

  • Altus Resource Capital (Ordinary Share)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them


On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet