Reversal of Fortune for Gold & Silver Funds? - Mutual Fund Commentary

Mutual Funds Reverse Losing Trend

Precious metals mutual funds have been able to reverse losses so far this year. Against losses over the last 1, 3 and even 5-year periods, the following funds carrying either a Zacks Mutual Fund Rank #1 (Strong Buy) or Zacks Mutual Fund Rank #2 (Buy) as we expect the funds to outperform its 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 the likely future success of the fund.

US Global Investors Gold & Precious Metals (USERX) seeks capital appreciation over the long run and protection from monetary instability and inflation. USERX invests a large share of its assets in equity and related securities of those companies whose primary operations are related to mining, fabrication, processing, marketing or distribution of precious metals including gold and silver among others.

US Global Investors Gold & Precious Metals currently carries a Zacks Mutual Fund Rank #2. USERX has gained 16.5% year to date, against losses of 10.3%, 16.5% and 14.8% over the last 1, 3 and 5-year periods. However, the annual expense ratio of 1.88% is higher than the category average of 1.40%.

Fidelity Select Gold Portfolio (FSAGX) invests heavily in companies whose principal operations are related to gold as well as in gold bullion or coins. A maximum of 25% of its assets are invested in precious metals via a wholly owned subsidiary. FSAGX invests mostly in firms involved in exploration, mining, processing, or dealing in gold, or to a lesser degree, in silver and other precious metals.

Fidelity Select Gold Portfolio currently carries a Zacks Mutual Fund Rank #1. FSAGX has gained 11.9% year to date, against losses of 13%, 18.2% and 15.3% over the last 1, 3 and 5-year periods. The annual expense ratio of 0.90% is lower than the category average of 1.40%.

American Century Global Gold Investor (BGEIX) invests in securities of global companies whose operations are related to gold or other precious metals. Investments are made with the purpose of attaining growth in capital and dividends by investing mostly in companies which are involved in the processing, mining, fabricating and distributing gold or other precious metals.

American Century Global Gold Investor currently carries a Zacks Mutual Fund Rank #1. BGEIX has gained 11.5% year to date, against losses of 13.6%, 17.9% and 15% over the last 1, 3 and 5-year periods. The annual expense ratio of 0.67% is lower than the category average of 1.40%.

Gabelli Gold AAA (GOLDX) seeks growth of capital over the long term. GOLDX invests a lion’s share of its assets in companies involved in operations related to gold and gold bullion. It invests in value stocks of companies having impressive growth potential. Gabelli Gold AAA may invest a major share of its assets in foreign companies which also include developed and emerging economies.

Gabelli Gold AAA currently carries a Zacks Mutual Fund Rank #2. GOLDX has gained 12.5% year to date, against losses of 9.2%, 14.6% and 12.2% over the last 1, 3 and 5-year periods. However, the annual expense ratio of 1.58% is higher than the category average of 1.40%.

USAA Precious Metals and Minerals (USAGX) seeks protection against inflation and long term capital growth. USAGX invests a majority of its assets in domestic and foreign companies with primary operations in the precious metals sector.

USAA Precious Metals and Minerals currently carries a Zacks Mutual Fund Rank #2. USAGX has gained 11% year to date, against losses of 11.8%, 18.4% and 15.5% over the last 1, 3 and 5-year periods. The annual expense ratio of 1.24% is lower than the category average of 1.40%.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Pick the best mutual funds with the Zacks Rank.