Over 100% return from gold funds in 4 months

February 27, 2009

Commodity Online
MUMBAI: Even as gold is continuing its race to unimaginable levels, there is another good news for investors. One gold fund has given over 100 per cent returns in just four months to investors.

Russell Global Gold fund investors have seen their money more than double since October 2008.

According to ETF Securities, investors in the Russell Global Gold fund made a 121 per cent return within four months.

The exchange traded fund (ETF), which tracks the performance of gold mining firms, was the strongest performing fund in a report by the issuer.

ETF Securities has seen a 33% increase in gold holdings over the past 3 months to all time highs, bringing gold assets to $7.0 billion (7.03mn ounces), the largest gold ETC/ETF holdings in Europe, and the second largest in the world, according to a weekly review by ETF Securities Ltd.

Other precious metals have received renewed interest, with ETFS Physical Platinum (PHPT) inflows reaching $14.4 million last week, equivalent to 14,423 ounces. ETFS Physical Palladium (PHPD) has also increased $13 million over the past two weeks, bringing combined PHPT and PHPD inflows to $44 million over the past fortnight. PHPT and PHPD weekly prices are up 38% and 32% respectively since the start of December compared to gold’s 32% rise over the same period.

ETFS Physical Silver (PHAG) has seen the strongest ETC returns so far in 2009, up 32% YTD. PHAG also saw the strongest ETC returns last week, with a 7% rise capping 5 consecutive weeks of gains. PHAG has outperformed PHAU by 16%, and other physical precious metals by between 10-16%, since December 2008. Despite this outperformance, the Gold:Silver price ratio remains above its 20 year average, ETF Securities Ltd said in their weekly report.

With government debt levels expected to increase over the coming years there are good reasons for conservative investors and the general public to want to hold a portion of their assets in gold.

Trading in gold exchange commodities (ETC) holdings over the past three months has risen by 33 per cent, with gold assets now standing at $7 billion.

Gold prices have soared above $1,000 per ounce in recent weeks and investor demand for physically-backed investments remains high.

Investment in the stocks and shares of gold companies is likely to rise in the current economic climate.

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