Top 5 Precious Metals Mutual Funds (Jan. 2011)

Diversification is one of the major benefits precious metals provide to a portfolio. This is because their value tends to appreciate when the dollar is in the doldrums and also when stocks are facing choppy weather. Mutual funds focusing on precious metals are a cost effective method of investing in these commodities. They also save investors the inconvenience of having to individually study companies from the sector. This is why mutual funds are the easiest and safest way to invest in precious metals.

Below we will share with you 5 top rated precious metals mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future.

Rydex Precious Metals (RYPMX) invests in domestic precious metals companies. The majority of its assets are used to purchase equity securities and derivatives. It is non-diversified and seeks capital growth. The precious metals mutual fund has a three year annualized return of 7.29%.

The precious metals mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.28% compared to a category average of 1.47%.

American Century Global Gold (BGEIX) seeks current income and capital growth. At least 80% of the fund’s assets are invested in companies dealing in gold. This includes firms whose primary operations include mining, processing and exploration activities. The precious metals mutual fund returned 28.7% in the last one year period and has a five year annualized return of 19.2%.

William B. Martin is the fund manager and has managed this precious metals fund since 1992.

Midas (MIDSX) invests at least 65% of its assets are invested in companies involved in the mining, processing and distribution of precious metals. Up to 35% of its assets may be invested in companies deriving a share of its revenues from the precious metals sector. It is non-diversified and a no load fund.

This precious metals mutual fund returned 28.93% in the last one year period.

Franklin Gold & Precious Metals A (FKRCX) seeks capital appreciation by investing in gold and precious metals or companies involved in mining or processing of these metals worldwide. The precious metals mutual fund returned 33.73% in the last one year period and has a ten year annualized return of 24.66%.

As of September 2010, this precious metals mutual fund held 87 issues, with 7.65% of its total assets invested in Newcrest Mining Ltd.

Van Eck International Investors Gold A (INIVX) invests the majority of its assets are invested in companies whose major operations primary operations consist of activities related to gold. It also invests in financial instruments which are backed by gold and in gold coins and bullion. The precious metals mutual fund has a ten year annualized return of 30.04%.

The precious metals mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.43% compared to a category average of 1.47%.

To view the Zacks Rank and past performance of all precious metals mutual funds, then click here.

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