Having a tough year? Spare a thought for Ani Markova and Robert Lyon, managers of the Smith & Williamson Global Gold & Resources Fund. Its price has dropped 33% so far this year and 13% last year. Gold mining is out of favour and it has broad exposure to around 120 stocks of all sizes, and 60% in mid- and small-cap names. Two-thirds are gold miners, with the remainder precious metals and minerals miners.
The fund's skew towards smaller firms means it was hit dramatically when the gold price tanked. Its second-largest holding is Tahoe Resources, a Canadian junior miner worth C$2bn. But this gives the fund a distinct profile, says Markova.
A gold price recovery could be on the cards, says Walters. Currency devaluation and demand from central banks due to inflation concerns could boost gold and there is a lack of supply. If you believe gold will bounce back then this is the fund for you. In the bull market it outperformed its peers, returning 73.8% in 2008 and 65.8% in 2009. The annual charge of 1.75% isn't cheap, although an initial charge of 5% can be waived by buying through a fund supermarket.
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| Central Fund of Canada Cls A | 5.1% |
| Tahoe Resources Inc | 4.7% |
| Goldcorp Inc | 4.3% |
| Argonaut Gold Inc | 3.8% |
| B2Gold Corp | 3.4% |
| Regis Resources Ltd | 3.0% |
| Silver Wheaton Corp | 3.0% |
| Agnico Eagle Mines | 2.9% |
| Randgold Resources | 2.8% |
| Eldorado Gold Corp | 2.7% |
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