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Uncertainty is looming over equity markets and astute investors looking for the right opportunity will find funds with significant exposure to precious metals a good investment option. These funds offer solid protection against inflation that almost no other reasonably liquid asset can provide. Moreover, precious metals securities came up with an outstanding performance in the first quarter of 2017, topping the broader mutual fund categories.
Gold Glitters as Uncertainty Persists
The equity market, which registered strong gains following upbeat sentiments over President Trump’s pro-growth economic policies, took a beating after the new healthcare bill failed to get through the House of Representatives. Additionally, uncertainty persists over the number of rate hikes that the Fed will make this year. Further, with some of the recent economic data coming in a bit soft, investors are closely watching Friday’s jobs data in order to understand the Fed rate hike pace this year.
Weaker-than-expected economic data also weighed on U.S. dollar, which, along with continued market uncertainty boosted gold prices. Moreover, gold prices increased 0.4% on Tuesday, to reach $1,258.40 an ounce, its best level since Feb 27. Additionally, it also increased 8.6% in the first quarter of this year.
Valuation Concerns a Boon for Gold
Recently on March 27, the Dow and the S&P 500 fell below their 50-Day moving average, clearly indicating that the market is gradually slowing down. This is mainly because when a benchmark index closes near its lower bound or support level of a trading channel, it indicates that demand is clearly falling and the best bet would be safe-haven sector like precious metals.
The SPDR Gold Shares (GLD) increased 6.3% and 9.1% in the last three months and year-to-date (YTD), respectively. According to Morningstar, the precious metal mutual fund category posted YTD and one-year annualized returns of 12% and 22.7%, respectively.
Buy These 5 Precious Metals Mutual Funds
Here, we have selected five precious metal mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging year-to-date (YTD) returns. These also have minimum initial investment within $5000 and low expense ratios.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
Vanguard Precious Metals and Mining (VGPMX - Free Report) seeks growth of capital over the long term. The fund invests heavily in the stocks of both domestic and foreign companies whose primary operations are regarding precious metals including gold. This non-diversified fund may also invest around one-fifth of its assets in gold, silver and other precious metals coins and bullion.
VGPMXhas a YTD return of 12.4%, and an expense ratio of 0.35% compared with the category average of 1.43%. VGPMX has a Zacks Mutual Fund Rank #1.
Van Eck International Investors Gold A (INIVX - Free Report) invests a large portion of its net assets in securities of companies engaged in gold-related activities including exploration, mining or processing of gold.INIVX seeks growth of capital and income for the long run.
The fund has a YTD return of 13%, and an expense ratio of 1.35% compared with the category average of 1.43%. INIVX has a Zacks Mutual Fund Rank #2.
American Century Global Gold Investor (BGEIX - Free Report) seeks capital growth and dividends. BGEIX invests in securities other than stocks, like debentures, bonds, gold, gold futures, etc. The fund involved in mining, fabricating, exploring, processing and distributing in gold.
BGEIX has a YTD return of 10.4%, and an expense ratio of 0.68% compared with the category average of 1.43%. BGEIX has a Zacks Mutual Fund Rank #2.
Franklin Gold and Precious Metals Advisor (FGADX - Free Report) invests a major portion of its assets in companies from the gold and precious metals sector. FGADX seeks capital appreciation by investing its assets primarily in small and mid-cap gold companies.
The fund has a YTD return of 13.8% and an expense ratio of 0.86% compared with the category average of 1.43%. FGADX has a Zacks Mutual Fund Rank #2.
Deutsche Gold & Precious Metals S invests the lion’s share of its assets in common stocks and other equities of domestic and foreign companies from the precious metals sector. The fund seeks high return through growth of income.
SCGDXhas a YTD return of 10.8% and an expense ratio of 1.00% compared with the category average of 1.43%. SCGDX has a Zacks Mutual Fund Rank #2.
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5 Precious Metals Mutual Funds to Shine in April
Uncertainty is looming over equity markets and astute investors looking for the right opportunity will find funds with significant exposure to precious metals a good investment option. These funds offer solid protection against inflation that almost no other reasonably liquid asset can provide. Moreover, precious metals securities came up with an outstanding performance in the first quarter of 2017, topping the broader mutual fund categories.
Gold Glitters as Uncertainty Persists
The equity market, which registered strong gains following upbeat sentiments over President Trump’s pro-growth economic policies, took a beating after the new healthcare bill failed to get through the House of Representatives. Additionally, uncertainty persists over the number of rate hikes that the Fed will make this year. Further, with some of the recent economic data coming in a bit soft, investors are closely watching Friday’s jobs data in order to understand the Fed rate hike pace this year.
Weaker-than-expected economic data also weighed on U.S. dollar, which, along with continued market uncertainty boosted gold prices. Moreover, gold prices increased 0.4% on Tuesday, to reach $1,258.40 an ounce, its best level since Feb 27. Additionally, it also increased 8.6% in the first quarter of this year.
Valuation Concerns a Boon for Gold
Recently on March 27, the Dow and the S&P 500 fell below their 50-Day moving average, clearly indicating that the market is gradually slowing down. This is mainly because when a benchmark index closes near its lower bound or support level of a trading channel, it indicates that demand is clearly falling and the best bet would be safe-haven sector like precious metals.
The SPDR Gold Shares (GLD) increased 6.3% and 9.1% in the last three months and year-to-date (YTD), respectively. According to Morningstar, the precious metal mutual fund category posted YTD and one-year annualized returns of 12% and 22.7%, respectively.
Buy These 5 Precious Metals Mutual Funds
Here, we have selected five precious metal mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging year-to-date (YTD) returns. These also have minimum initial investment within $5000 and low expense ratios.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
Vanguard Precious Metals and Mining (VGPMX - Free Report) seeks growth of capital over the long term. The fund invests heavily in the stocks of both domestic and foreign companies whose primary operations are regarding precious metals including gold. This non-diversified fund may also invest around one-fifth of its assets in gold, silver and other precious metals coins and bullion.
VGPMXhas a YTD return of 12.4%, and an expense ratio of 0.35% compared with the category average of 1.43%. VGPMX has a Zacks Mutual Fund Rank #1.
Van Eck International Investors Gold A (INIVX - Free Report) invests a large portion of its net assets in securities of companies engaged in gold-related activities including exploration, mining or processing of gold.INIVX seeks growth of capital and income for the long run.
The fund has a YTD return of 13%, and an expense ratio of 1.35% compared with the category average of 1.43%. INIVX has a Zacks Mutual Fund Rank #2.
American Century Global Gold Investor (BGEIX - Free Report) seeks capital growth and dividends. BGEIX invests in securities other than stocks, like debentures, bonds, gold, gold futures, etc. The fund involved in mining, fabricating, exploring, processing and distributing in gold.
BGEIX has a YTD return of 10.4%, and an expense ratio of 0.68% compared with the category average of 1.43%. BGEIX has a Zacks Mutual Fund Rank #2.
Franklin Gold and Precious Metals Advisor (FGADX - Free Report) invests a major portion of its assets in companies from the gold and precious metals sector. FGADX seeks capital appreciation by investing its assets primarily in small and mid-cap gold companies.
The fund has a YTD return of 13.8% and an expense ratio of 0.86% compared with the category average of 1.43%. FGADX has a Zacks Mutual Fund Rank #2.
Deutsche Gold & Precious Metals S invests the lion’s share of its assets in common stocks and other equities of domestic and foreign companies from the precious metals sector. The fund seeks high return through growth of income.
SCGDXhas a YTD return of 10.8% and an expense ratio of 1.00% compared with the category average of 1.43%. SCGDX has a Zacks Mutual Fund Rank #2.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>