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Glittering returns limited to bullion funds

swon@globeandmail.com

What are we looking for?

Leaders and laggards among precious metals bullion and equity funds this year.

Given that the price of gold has retreated to around $1,780 (U.S.) an ounce from a record high of over $1,920 in September, let's see how these funds stack up. Gold is up about 25 per cent this year.

The screen

We ranked the eight best and eight worst performers for the first 10 months of this year. U.S. dollar, segregated and duplicate versions of the funds were excluded.

What did we find?

Bullion outshining precious metals equity funds.

And some bullion funds outshining other bullion peers despite investing in the same metal.

Claymore Gold Bullion (hedged) exchange-traded fund led the way with a 21.5-per-cent gain followed by Sprott Gold Bullion, up 19.5 per cent and BMG Gold Bullion, up 18.6 per cent. All funds store their bullion at ScotiaMocatta, the precious metals unit of Bank of Nova Scotia.

The return differences can stem from a fund's fees, which eat away at returns. Performance can also be affected by whether a fund hedges its exposure to U.S. dollars, the currency in which gold is priced. Other factors include the price bullion is purchased at, and whether a fund invests in other metals or stocks as well.

Lower fees helped Claymore Gold Bullion, which charges 0.56 per cent, and Sprott Gold Bullion, which charges 1.2 per cent. Mackenzie Universal Gold Bullion Class, which gained 17.5 per cent, is nearly all invested in gold bullion but has tiny amounts in platinum, silver and palladium. BMG Bullion, up 8.1 per cent, is invested in gold, silver and platinum.

But CI Signature Gold Corporate Class, up 5.7 per cent, and Dynamic Strategic Gold Class, off 1.7 per cent, have less glitter to their numbers because they hold bullion and stocks.

All precious metals equity funds, however, have been in the red this year as their stocks have been pummelled in the market downdraft. They have also been hurt by profit-taking and concerns about the miners' margins and the sustainability of a surging gold price.

*****

HOW PRECIOUS METALS BULLION AND EQUITY FUNDS ARE FARING THIS YEAR

Last ReportedYTD toAnnual Returns (Jan. 1 to Dec. 31)
FundCategoryMERAssets ($ Mil.)Oct. 31, 201120102009200820072006
Leaders
Claymore Gold Bullion ETFMisc. - Commodity0.56602.921.45%26.58%n/an/an/an/a
Sprott Gold Bullion Fd-AMisc. - Commodity1.20245.819.53%21.38%n/an/an/an/a
BMG Gold BullionFund-AMisc. - Commodity3.06111.018.57%14.95%n/an/an/an/a
Mackenzie Univ Gold Bullion Cl AMisc. - Commodity2.6182.917.54%n/an/an/an/an/a
BMG BullionFund-AMisc. - Commodity3.30311.38.05%31.10%19.29%-4.08%2.54%24.52%
CI Signature Gold Corporate ClassMisc. - Commodity2.4551.95.71%n/an/an/an/an/a
Dynamic Strategic Gold ClassMisc. - Commodity2.47318.0-1.69%41.29%n/an/an/an/a
Mackenzie Univ Wld Prec Metal ClassPrec. Metals Equity2.57112.6-4.64%49.07%68.61%-45.03%7.63%53.82%
Laggards
CIBC Precious MetalsPrec. Metals Equity2.42133.2-28.19%66.95%63.11%-41.96%6.59%58.16%
Middlefield Precious Metals ClassPrec. Metals Equity2.7332.0-24.48%89.26%33.81%n/an/an/a
Sprott Gold and Precious MineralsPrec. Metals Equity2.84676.3-19.65%74.73%113.82%-49.63%-16.43%56.19%
Altamira Precious & Strategic MetalPrec. Metals Equity2.4682.7-18.36%73.34%58.34%-29.41%-2.39%42.73%
TD Precious MetalsPrec. Metals Equity2.27290.8-18.04%44.85%61.57%-33.40%4.64%49.39%
Claymore S&P/TSX Glob. Mining ETFPrec. Metals Equity0.5950.3-18.00%26.54%54.28%-38.85%n/an/a
RBC Global Precious MetalsPrec. Metals Equity2.091400.0-17.52%75.12%65.68%-26.18%9.04%52.40%
Dynamic Precious MetalsPrec. Metals Equity2.60973.8-16.92%68.39%60.92%-27.65%5.60%62.67%
S&P/TSX Total Return-6.94%17.61%35.06%-33.00%9.83%17.26%
S&P 500 composite ($ Cdn)1.38%7.18%5.51%-23.76%-12.21%13.56%
Source: Globe Investor, Bloomberg

© 2007 The Globe and Mail. All rights reserved.

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