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A golden month for precious metal equity funds

swon@globeandmail.com

What are we looking for?

Precious metal equity funds shining the brightest this month.

The price of gold has been on tear with the gold futures in New York hitting a record high over $1,300 (U.S.) an ounce last Friday before settling at $1,298.10. Silver closed at a 30-year high of $21.29 an ounce.

The search

We screened the 15 largest precious metal equity funds to rank them by the best performers for this month to Sept. 23. U.S. dollar, segregated, pooled and duplicate versions of the funds were excluded.

What did we find?

Active managers vastly outpaced the iShares S&P/TSX Global Gold exchange-traded fund. And three funds emerged in double-digit return territory.

Sprott Gold and Precious Minerals led the way with a 12.7-per-cent gain. It got a lift from smaller company stocks, which make up a third of the fund. Sandspring Resources Ltd. and Guyana Goldfields Inc. were among the big movers among the gold plays, while Minera Andes Inc. was a star in the silver sector.

"In the last month, you have seen small caps suddenly wake up," said the fund's co-manager Charles Oliver of Sprott Asset Management Inc. "The mid-caps were winners over the last year."

The iShares ETF only gained 1 per cent because it is invested in larger company names that have "not done much," Mr. Oliver said.

RBC Global Precious Metals rose 12 per cent with junior resource companies contributing to performance as well. "A long-standing favourite of ours, Andean Resources, was the subject of two takeover bids," said co-manager Chris Beer of RBC Asset Management Inc.

Australia-listed Avoca Resources Inc., is merging with Anatolia Minerals Ltd. to create a new fast-growing, intermediate gold producer, he added. "We are entering a seasonal period where gold stocks have often incurred consolidation," Mr. Beer said in an e-mail. "After the strong run of late, we would not be surprised to see a modest pullback."

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How the 15-largest precious metals equity funds are faring this month
(Aug. 31) (Sep. 23) % return to Aug. 31
Fund name Assets ($-mil) Latest MER MTD % rtn YTD % rtn 1-yr 3-yr 5-yr 10-yr From Inception
Sprott Gold and Precious Minerals623.02.8412.7%36.2%68.6%11.1%16.4%599.7%
RBC Global Precious Metals1,128.72.0411.9%40.0%61.7%22.1%26.8%29.6%2205.8%
CIBC Precious Metals138.72.4010.2%36.1%58.7%9.9%20.8%21.5%170.9%
BMO Precious Metals108.02.299.5%33.7%58.4%12.5%20.3%17.5%186.9%
Dynamic Precious Metals956.82.758.5%53.6%70.4%25.0%30.4%26.1%1659.5%
Mackenzie Univ Wld Prec Metal Class98.72.508.3%24.6%44.0%6.3%18.2%620.0%
IG MK Global Precious Metals Cl-A102.02.688.1%23.0%41.1%36.1%
Mackenzie Univ Precious Metals485.02.448.1%23.8%42.6%5.3%16.6%19.4%446.6%
TD Precious Metals292.62.158.0%26.6%46.1%14.4%20.4%19.6%628.3%
AGF Precious Metal676.32.567.8%31.9%53.2%11.5%23.6%24.5%681.3%
Altamira Precious & Strategic Metal70.52.357.5%37.3%61.8%16.8%19.3%20.8%288.2%
Sentry Precious Metals Grwth590.42.756.3%53.2%91.8%25.8%33.0%24.2%576.2%
BMG BullionFund-A217.52.984.1%13.6%22.0%12.2%13.0%82.2%
Sentry Mining Opportunity Cl52.02.882.4%38.1%86.3%1.3%45.2%
iShares S&P/TSX Global Gold Index1,259.40.551.1%21.1%30.3%14.2%17.1%332.0%
S&P/TSX Total Return1.7%5.0%12.7%-1.5%5.1%2.8%
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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