U.S. based mutual funds that invest in gold topped the list of U.S. fund performances for the first six months of 2002.
The average gold fund rose 50.5% for the period ending June 28, compared with an 11.7% loss for the average stock mutual fund, according to Lipper Inc., a wholly owned subsidiary of London-based Reuters, which supplies mutual fund data.
Several reasons are cited for the funds’ dramatic increase.
First, gold funds buy shares of gold mining companies and many have lowered or eliminated their hedging positions, which limit their profits as the price of gold increases. The price of gold rose to a high of US$327.80 per oz. in June 2002 from US$278.70 in June 2001 — a 17.6% increase. Many analysts believe the rise will continue as long as there is uncertainty and distrust in the equity markets.
Also, gold is considered a safe haven for assets during tumultuous political periods.
Finally, some analysts suggest that because of decreased exploration in recent years (a consequence of the low gold price), the supply of the yellow metal will diminish in coming years.
The 10 Best-Performing U.S. Gold Funds: First Half 2002
| Assets | 1st Half/02 | 1 Year | |
| (US$Mil) | (% gain) | (% gain) | |
| US Global: World Gold | 127.1 | 97.79 | 103.8 |
| US Global: Gold Shares | 77.3 | 87.59 | 92.91 |
| First Eagle SoGen: Gold | 61.9 | 82.62 | 103.6 |
| Van Eck: Int’l Gold, A | 212.6 | 75.51 | 91.24 |
| Tocqueville: Gold Fund | 146 | 66.22 | 81.73 |
| Monterey: OCM Gold | 37.3 | 64.83 | 78.32 |
| Gabelli Gold Fund, AAA | 98 | 64.79 | 78.4 |
| Amer Cent: GI Gold, Inv. | 451.9 | 61.13 | 78.56 |
| Evergreen Prc Mtl, A | 114.7 | 60.37 | 68.92 |
| ING Prc Met Fund, A | 101.9 | 58.18 | 70.82 |
— The preceding is from Gold News, published by the London-based World Gold Council.
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