In the world of mutual fund investments, gold mutual funds hold a special place for investors. Gold’s traditional role as a store of wealth and inflation hedge has contributed to its current role as an important asset class in many portfolios. If you’re concerned over the increased volatility and risk of a decline in the stock, bond and other capital markets, a gold mutual fund could provide protection and diversity to your portfolio. Also, your portfolio’s exposure to the gold market could serve as a hedge against inflation and a decline in the value of the dollar against other currencies. Keep reading to find out more about gold mutual funds.
Quick Look at the Best Gold Mutual Funds:
- Gabelli Gold A
- OCM Gold
- Franklin Gold and Precious Metals A
- Fidelity Select Gold
- Gold Bullion Strategy Investor
Table of Contents
- Quick Look at the Best Gold Mutual Funds:
- The Best Gold Mutual Funds
- Why Invest in Mutual Funds?
- What to Look for in Gold Mutual Funds
- Do Mutual Funds Always Make Money?
- Compare Online Mutual Fund Brokers
- Frequently Asked Questions
The Best Gold Mutual Funds
While you may be able to find many gold mutual funds, most of these funds also invest in other precious metal assets such as platinum, palladium and silver. Also, some of these funds concentrate on investing in gold mining companies, while others trade gold futures or invest primarily in gold-related exchange-traded funds (ETFs) such as the Aberdeen Standard Gold ETF Fund (SGOL). To assist you in selecting a gold mutual fund for investment purposes, Benzinga has compiled the list below of five of the top gold mutual funds you can invest in:
1. Gabelli Gold A (GLDAX)
Launched by GAMCO Investors Inc. in 1994, Gabelli Gold Fund Inc. (GOLDX) is managed by Gabelli Funds LLC. Gabelli Gold Fund is a diversified, no-load mutual fund that focuses on long-term capital appreciation through investing globally in gold mining and other related companies.
The fund is managed by Caesar Bryan, who has been with Gabelli Funds since 1994. Bryan had seven years of prior experience in gold investment before joining Gabelli. As a fund manager, Bryan has done well over time, although, because of fluctuations in the price of gold and other factors, the fund’s returns have been inconsistent.
The company’s top 10 holdings, which make up 54.1% of the fund, currently include:
- Newmont Corp. (NYSE: NEM)
- Franco-Nevada Corp. (NYSE: FNV)
- Endeavour Mining plc (OTCM: EDVMF)
- Wheaton Precious Metals Corp. (NYSE: WPM)
- Barrick Gold Corp. (NYSE: GOLD)
- Wesdome Gold Mines Ltd. (TSE: WDO)
- Agnico Eagle Mines Ltd. (NYSE: AEM)
- Northern Star Resources Ltd. (ASX: NST)
- Kirkland Lake Gold Ltd. (NYSE: KL)
- Gold Fields Ltd. (NYSE: GFI)
For an updated list of GLDAX holdings, click here.
2. OCM Gold (OCMGX)
Launched in 1988 and managed by Gregory Orell of Orell Capital Management Inc., U.S.-based OCM Gold Fund invests mostly in publicly held mining company stocks quoted on markets around the world. Its investments also include the foreign and domestic stocks of companies of any size that provide goods and services in all sectors related to the gold mining and precious metals industries.
OCM Gold’s stated goal is for long-term capital growth. The fund invests over 80% of its net assets in the precious metals sector and 59% of assets in the fund's top 10 holdings, which presently include:
- Wesdome Gold Mines Ltd. (TSE: WDO)
- Newmont Corp. (NYSE: NEM)
- Agnico Eagle Mines Ltd. (NYSE: AEM)
- Wheaton Precious Metals Corp. (NYSE: WPM)
- Barrick Gold Corp. (NYSE: GOLD)
- Jaguar Mining Inc. (TSX: JAG)
- Aya Gold & Silver Inc. (TSX: AYA)
- Endeavour Mining plc (OTCM: EDVMF)
- SSR Mining Inc. (NASDAQ: SSRM)
- AngloGold Ashanti Ltd. ADR (NYSE: AU)
For an updated list of OCMGX’s holdings, click here.
3. Franklin Gold and Precious Metals A (FKRCX)
The Franklin Gold and Precious Metals A fund was started in 1969 and is currently managed by Steve Land. The fund’s mission statement is, "We think precious metals are attractive because they are a hard asset that's not tied to a particular country or financial system, potentially providing stability in times of economic uncertainty."
Even though this fund’s value has been more volatile than others over the last decade, FKRCX has also provided investors with slightly better returns. The Franklin Gold and Precious Metals Fund focuses primarily on capital appreciation followed by income generation through dividends and interest.
A minimum of 80% of the fund is invested in stocks of miners and precious metals processors dealing in gold, silver, platinum and palladium. The gold mutual fund currently holds 140 stocks of many startups and new companies, with a 4% or higher stake in 30 of them. The fund's top 10 holdings currently include:
- Alamos Gold Inc. (NYSE: AGI)
- B2Gold Corp. (NYSE: BTG)
- Barrick Gold Corp. (NYSE: GOLD)
- Endeavour Mining plc (OTCM: EDVMF)
- Impala Platinum Holdings Ltd. (OTCM: IMPUY)
- Newcrest Mining Ltd. (ASX: NCM)
- Newmont Corp. (NYSE: NEM)
- Perseus Mining Ltd. (OTCM: PMNXF)
- Red 5 Ltd. (OTCM: REDLF)
- SSR Mining Inc. (NASDAQ: SSRM)
For an updated list of FKRCX’s holdings, click here.
4. Fidelity Select Gold (FSAGX)
The Fidelity Select Gold fund was started in 1985 and is currently managed by Steven C. Calhoun. This nondiversified fund invests more than 80% of its assets in equities of companies involved in gold and other precious metals and minerals-related endeavors. Through a wholly-owned subsidiary, the fund also invests as much as 25% of its assets directly in gold and other precious metals.
With respect to equities, the fund focuses its investments on stocks of companies engaged in mining, processing and exploration or those that have direct dealings in gold, other precious metals and minerals. Making up 68.86% of its portfolio, FSAGX’s top 10 investments include:
- Newmont Corp. (NYSE: NEM)
- Barrick Gold Corp. (NYSE: GOLD)
- Franco-Nevada Corp. (NYSE: FNV)
- Agnico Eagle Mines Ltd. (NYSE: AEM)
- Wheaton Precious Metals Corp. (NYSE: WPM)
- Newcrest Mining Ltd. (ASX: NCM)
- Gold Fields Ltd. (NYSE: GFI)
- Northern Star Resources Ltd. (ASX: NST)
- Orla Mining Ltd. (NYSE: ORLA)
- Evolution Mining Ltd. (ASX: EVN)
For an updated list of FSAGX’s holdings, click here.
5. Gold Bullion Strategy Investor (QGLDX)
Gold Bullion Strategy Investor invests all of its assets in gold bullion-related investments. With a focus on reflecting the physical gold bullion market in its value, the fund’s investments include over-the-counter, gold-forward contracts, gold ETFs and gold exchange-traded notes (ETNs). The remainder of the fund's assets is used to offset the fund’s expense ratio by investing in fixed-income securities.
QGLDX is designed as a buy-and-hold mutual fund. Through the employment of proprietary computer models, the fund’s managers invest in a variety of gold futures contracts every day to ensure that the price of gold is tracked as accurately as possible. Because of its unique trading parameters, QGLDX offers direct exposure to tracking gold bullion’s daily price within a mutual fund structure. The company’s top 10 holdings, which make up 47.91% of the fund, include:
- Gbsf Fund Ltd. (GSFBF)
- Fidelity® Investment Money Market Government I (FIGXX)
- Invesco BulletShares 2025 Corporate Bondd ETF (BSCP)
- Invesco BulletShares 2024 Corporate Bond ETF (BSCO)
- SPDR® Portfolio Short Term Corporate Bond ETF (SPSB)
- PIMCO Enhanced Short Maturity Active ETF (MINT)
- iShares 1-5 Year Investment Grade Corporate Bond ETF (NASDAQ: IGSB)
- Invesco BulletShares 2023 Corporate Bond ETF (NASDAQ: BSCN)
- Invesco BulletShares 2022 Corporate Bond ETF (BSCM: XNAS)
- Invesco Ultra Short Duration ETF (ARCX: GSY)
For an updated list of QGLDX’s holdings, click here.
Why Invest in Mutual Funds?
The reasons to invest in mutual funds are many. Two of the main reasons that mutual funds have become the most popular investment vehicle in the U.S. is the great convenience of using them compared to managing an investment portfolio and the variety of investment options you can select from among the different mutual funds.
Some of the additional important advantages of investing in mutual funds include:
- Instant diversification for your portfolio
- Professionally managed investments
- Dividend income and reinvestment
- Risk mitigation
- High liquidity
- Tax benefits
What to Look for in Gold Mutual Funds
The more obvious metrics to look for when reviewing a gold mutual fund for investment purposes include a fund’s overall and yearly returns. You will also want to check how the funds are invested and managed.
You might also want to consider several other elements when evaluating which gold mutual fund to invest in, including:
- Minimum investment: Most mutual funds require a minimum of $1,000 as an initial investment. Others may ask for $3,000 or more as an initial investment, while some funds have no minimum requirement.
- Assets under management (AuM): Both the asset mix and the number of assets managed can be important when choosing a gold mutual fund. Too small an AuM will typically indicate lower liquidity in the market for the fund, and more of its returns might need to be used for expenses.
- Expense ratio: The expense ratio or percentage reflects the amount of money the fund uses to manage its assets, or the fund’s operating costs relative to its assets under management. Most mutual funds that invest in large assets have an expense ratio percentage of 1% of funds under management while funds that invest in smaller capitalization stocks typically have an expense ratio percentage of 1.25%.
- Management style: Some funds actively manage their assets by buying and selling in the futures and spot markets. They might also depend on a star fund manager selecting investments or use a proprietary computer algorithm to establish and liquidate positions. Other funds might use a more passive approach in which the fund manager seeks to mirror a major market index such as the S&P500.
Do Mutual Funds Always Make Money?
The answer to this question is no, mutual funds do not always make money. With that noted, however, the majority of well-managed mutual funds do show positive returns over time. Mutual funds make or lose money depending on which assets they invest in, how the markets for those assets perform and how they manage those assets.
While some mutual funds perform better than others, their superior returns depend in large part on the assets invested in and how those assets are managed by the fund manager. For investors who don’t have the time to research the markets thoroughly to pick good investment assets, mutual funds offer a relatively safe, convenient and viable investment solution.
Compare Online Mutual Fund Brokers
Online stock brokers generally offer access to mutual funds to their clients. Some funds can be purchased directly from the fund provider, like Fidelity Select or the Franklin Gold fund. Benzinga has compiled a list of the best online brokers for buying mutual funds below:
- IBKR Mutual Funds
Securely through Interactive Brokers’ website
Securely through Interactive Brokers’ website
Best For:
Active and Global Traders
Rating:
Read Review
- Magnifi
securely through Magnifi's website
securely through Magnifi's website
Best For:
AI Investing
Rating:
Read Review
Frequently Asked Questions
Q
Is it good to invest in mutual funds?
A
Mutual funds are very easy to invest in, so for most people who lack the time and experience needed to select good investments, investing in mutual funds makes good sense overall.Mutual funds offer a viable alternative to self-directed investments and provide expert money-management services for a low fee. Mutual funds also give investors a choice among a variety of asset classes and investment types ranging from commodities like gold to various stock market sectors to emerging markets equities.
Q
Which is better gold ETF or gold mutual fund?
A
It depends. Both fund types can offer decent returns that have some relationship to the price of gold and may suit different investment objectives. The difference between the two has to do with the fund’s management and the assets it invests in. A gold ETF is generally passively managed to closely track the price of gold, while a gold mutual fund typically invests in the stocks of gold mining and processing companies, as well as in gold bullion ETFs and physical gold.
Q
Is gold a good investment?
A
Gold, along with silver, is a fairly stable investment but can go up and down depending on the economic climate.
