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 Reports and Commentary from the Investment World

Reports and commentaries are posted here on a regular basis.


Investec Global Gold Fund


Investec Asset Management Global Gold Fund. 2003-04-01

If you believe, as we do, that Gold prices are going to go a lot higher, then this fund will do VERY well in the next few years.

We are no experts in commodities, so we like to use funds with a good track record and fund managers that know the market.

Investec Asset Management based in Guernsey, are one of our favourites when it comes to Energy and Gold funds.

Fund Objective

The Fund aims to achieve capital appreciation through  investment in quoted gold mining shares. Movements in the gold price are likely to have a more than proportionate effect on the profitability of gold mining companies with consequent implications for the volatility of their share prices.

Adviser's comments

The flat return delivered by the gold price over the reporting period conceals sharp swings in value. In the first quarter gold strengthened from an undervalued position as equities declined. As a safe store of value, gold was in strong demand as the US dollar weakened sharply and concerns about the sluggish global economy and war in Iraq intensified.

The Fund maintained a preference for unhedged producers in weak currency areas, e.g. South Africa. However; the negative impact of the strong rand and South Africa's high inflation on producers' profits meant that these companies made a negative contribution to performance. In response, the Fund began to take profits on investments in SA companies and switch into US gold producers, which offered better relative value.

Our outlook remains positive for the Fund. The Washington Accord, which prevents sales of gold stocks by central banks, expires in September 2004. Gold remains attractive as an international currency, particularly in an environment of low interest rates and a weak US dollar; having a single price and being independent of government backing.

Top ten holdings

  • Newmont Mining
  • Ashanti
  • Goldfields GDR
  • Gold Fields ADR
  • Freeport-McMoran Copper & Gold
  • African Rainbow Mining
  • Barrick Gold
  • Anglogold ADR
  • Harmony Gold
  • Gold Bullion
  • Western Areas  
  • Buy this fund up to US$ 28 and hold on for the long term.

Disclaimer: All the information above is provided as a service for individuals and institutions. It should in no way be construed as a recommendation as an investment. Investment decisions should be based on the risk tolerance and planning horizon of the investor. Market participants must understand that past performance is also not a guarantee or predictor of future results.