Gold News

Gold & Silver Beat 99.8% of Wall Street's Finest in Crisis

Wondering how the top US mutual funds stack up vs. the Gold Price since 2007...?

PLEASE REMEMBER – past performance is no guide to the future, writes Adrian Ash at BullionVault.

But if you don't study history, just what do you plan to study instead?

December 2011 marked the fifth anniversary of the end of Ownit Mortgage Solutions– a small lender in the big scheme, but "maybe the canary in the coalmine," according to one mortgage-backed security manager back at the end of 2006.

Let's hope that MBS manager found a new career quick smart. Because by March 2007, tittle-tattle claimed that distress was spreading from the subprime collapse to US and Eurozone hedge funds. Come July, news leaked and then broke of the collapse of two such funds at Bear Stearns. Today's permanent emergency had begun.

What fun lay ahead! And with the Gold Price at just $650 per ounce too! Silver was knocking around $13 the ounce. Together, that's made for quite the track record since...

The Top US Fund Managers: Annualized Returns in Per Cent

1. US Dollar precious metals prices from the LBMA, periods ending 30/12/2011.
2. Fund count by BullionVault, using Lipper data via WSJ Online.
3. Single-best fund, best return & average return of all mutual funds taken from MorningStar.

USAA Precious Metals & Minerals you probably know. Co-manager Mark Johnson steps down in March, leaving Dan Denbow to continue running the single-best performing US mutual of the last 10 years. Other big precious-metal miner funds pack the list of 11 mutual funds to outperform silver and the Gold Price since the start of 2002, too.

GVPIX you might expect to know as well, what with it delivering 44% returns in calendar-year 2011. ProFunds US Government Plus led a bunch of long Treasury-bond portfolios in fact. The old Lehman's TLT tracker returned 34% – and who needed active management, let alone risk, when the warm embrace of Uncle Sam's debts was so very much warmer?

But the stand-out fund over both the last 3 and the last 5 years? Don't feel hard done by if you never heard of OSFDX, the only mutual to beat gold for US investors since the eve of this crisis. With a minimum investment of $3000, Oceanstone has apparently got less than $15 million in assets. Its stellar 5- and 3-year records include a ridiculous 264% made in 2009, just from doing what it does – seeking value in common stocks on the NYSE.

Yes, it can be done. And yes, it could be done too. US investors really could beat a lump of rare, indestructible, un-indebted Gold Bullion since the alarm bells rang out at the turn of 2007. Because out of the 7,500 separate funds available – with 22,000 shares classes to choose from – one fund actually managed it. Just like 7 funds (go on, count 'em...all of 'em) managed to beat silver since the turn of 2009, and fully 11 separate US mutual funds managed to beat silver since the start of 2002.

"The best performers in sector exchange traded funds [ETFs] this year track industries known for dividends and some insulation from economic cycles," wrote Global Trends' Tom Lydon in the last month of 2011. Neither gold or silver pay any dividend, of course, but they've clearly offered investors a good rubber-clad insulation from the shocks of the last half-decade and more.

Both silver and Gold Bullion sit within the top 0.2% of US mutual funds over the last 10, 5 and 3 years. No guarantee that performance will continue, of course. But you might want to ask your favorite mutual-fund manager what he or she is planning to do in 2012 to beat a lump of dumb metal.

Buying Gold or physical Silver Bullion in 2012...? Make it simple, secure and ultra-low-cost using the award-winning, industry-backed BullionVault...

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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