The Best Precious Metals Mutual Funds for Diversification and Inflation Protection

Precious metals mutual funds offer an opportunity for investors to diversify their portfolios and hedge against inflation. This article explores five top-performing precious metals mutual funds, their managers, strategies, and key statistics.

Basics

Investors have long sought after precious metals as a way to diversify their portfolios and protect their wealth. These metals, including gold, silver, platinum, and others, have unique properties that make them attractive investments. Precious metals mutual funds primarily focus on mining stocks, although some may also hold physical bullion. This article introduces the top 5 precious metals mutual funds, delving into their objectives, managers, investments, and performance.

Allspring Precious Metals Fund

The Allspring Precious Metals Fund (formerly known as the Wells Fargo Precious Metals Fund) was launched in 1998. Michael P. Bradshaw manages this fund's primary objective is long-term capital growth. To achieve this goal, it invests at least 80% of its assets in companies involved in the exploration, mining, and processing of gold and other precious metals or those generating a significant portion of its revenues from such activities. The fund may allocate up to 40% of its assets to emerging market equities and up to 25% to debt securities related to metals. It distributes dividends and capital gains annually. Key details include:

• Net Expense Ratio: 1.84%
• Five-Year Total Return (as of 2022): 6.80%
• Total Portfolio Assets (as of 2022): $379.8 million
• Major Portfolio Holdings: Barrick Gold, Wheaton Precious Metals, Kinross Gold, Gold Field Limited, and Franco-Nevada Corp.

Fidelity Select Gold Portfolio Fund

Established by Fidelity Investments in 1985, the Fidelity Select Gold Portfolio Fund focuses on capital appreciation. Managed by Steven Calhoun, it invests at least 80% of its assets in the common stocks of companies engaged in various gold-related operations, including gold bullion and coins. The fund also considers additional precious metals and related instruments. Key details include:

• Net Expense Ratio: 0.76%
• Five-Year Average Total Return (as of 2022): 6.73%
• Total Portfolio Assets (as of 2022): $1.3 billion
• Major Holdings: Newmont, Barrick, Franco-Nevada, and Agnico Eagle Mines

Gabelli Gold Fund

The Gabelli Gold Fund (GLDAX) was issued in 1994 by Gabelli Funds. It seeks long-term capital appreciation and is managed by Caesar Bryan. The fund invests at least 80% of its assets in U.S. domestic and foreign-issued equity securities of companies involved in gold-related operations and gold bullion. Key details include:

• Net Expense Ratio: 1.48%
• Five-Year Average Annualized Return (as of 2022): 9.20%
• Total Portfolio Assets (as of 2022): $431 million
• Top Holdings: Franco-Nevada, Newmont, Barrick, and Agnico Eagle Mines

USAA Precious Metals and Minerals Fund

Launched in 1984 by USAA Investments, the USAA Precious Metals and Minerals Fund aims to preserve capital against inflation and reduce portfolio volatility. Managed by Mannik Dhillon, it invests at least 80% of its assets in companies engaged in the exploration, mining, or processing of precious minerals. Key details include:

• Net Expense Ratio: 1.12%
• Five-Year Average Annual Total Return (as of 2022): 8.18%
• Total Portfolio Assets (as of 2022): Approximately $679 million
• Major Portfolio Holdings: Newmont, Barrick, Agnico Eagle Mines, and Kinross

Invesco Gold and Special Minerals Fund

Founded in 1983, the Invesco Gold and Special Minerals Fund seeks long-term capital appreciation. Managed by Shanquan Li, it primarily invests in mining companies focused on gold and other precious metals. Key details include:

• Net Expense Ratio: 1.05%
• Total Assets (as of 2022): $2.3 billion
• Five-Year Average Annual Return: 12.57%
• Primary Holdings: Barrick, Northern Star Resources, Newmont, and Evolution Mining
• Gold comprises 75% of the portfolio.

Conclusion

Precious metals mutual funds can be a valuable addition to an investment portfolio, offering diversification and protection against inflation. Each of the top 5 funds mentioned in this article has its unique strategy and management style, catering to different investor preferences and risk appetites. It is essential for investors to carefully consider their investment goals and conduct thorough research before choosing a precious metals mutual fund that aligns with their financial objectives.