Top 5 Precious Metals Mutual Funds (May 2011)

Mutual funds investing in precious metals can be a safe haven of refuge when the economy is facing rough weather and markets are heading south. During such times, this category of funds provides consistently higher returns and can outperform stocks. Additionally, a small amount of precious metals in a portfolio can provide sufficient diversification as well as protection against inflation. With the advantages of professional management and a diversified portfolio, precious metals mutual funds are the brightest choice for investing in this sector.

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.

U.S. Global Investors Gold and Precious Metals (USERX) invests the majority of its assets in equity and related securities from the precious metals industry. The fund purchases common and preferred stock, convertible securities and invests in depository receipts. This precious metals fund returned 33.76% in the last one year period.

The precious metals mutual fund has a minimum initial investment of $5,000 and an expense ratio of 1.80% compared to a category average of 1.41%.

First Eagle Gold A (SGGDX)seeks capital appreciation over the long term. A large proportion of the fund’s assets are invested in gold, related securities or those issued by companies from the gold industry. The precious metals fund has a ten year annualized return of 26.35%.

Rachel Benepe is the fund manager and she has managed this precious metals mutual fund since 2009.

RiverSource Precious Metals & Mining A (INPMX) invests at least 65% of its assets in the precious metals sector. The fund primarily purchases securities issued by precious metals or mining companies. At least half of the fund’s assets are used to purchase foreign securities. The precious metals mutual fund has a five year annualized return of 20.3%.

The precious metals fund has a minimum initial investment of $2,000 and an expense ratio of 1.43% compared to a category average of 1.41%.

GAMCO Gold AAA (GOLDX) seeks capital growth over the long term. At least 80% of the fund’s assets are invested in domestic and foreign companies which engage in gold-related activities. A substantial portion of its assets are utilized to purchase foreign securities The precious metals fund has a three year annualized return of 9.48%.

As of December 2010, this precious metals mutual fund held 58 issues, with 10.43% of its total assets invested in Newcrest Mining Ltd.

Fidelity Select Gold (FSAGX) invests the majority of its assets in companies whose principal operations are related to gold, and in gold bullion and coins. Up to 25% of the fund’s assets may be invested in gold and other precious metals through a wholly-owned subsidiary. It is non-diversified and a no load fund.

This precious metals mutual fund returned 36.44% in the last one year period

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

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