Thirteen investment trusts have high exposure to gold mining shares and gold bullion, according to research by broker Oriel Securities. Specialist trusts tend to have the most exposure, but a number of more generalist trusts also invest in gold mining shares.
Gold has hit the headlines recently following steep falls which took it from a peak of $1,921 in September 2011 to $1,468 at the end of April. During the month of April there were also some significant moves in the price, with it falling to a low of $1,359 on the 15 April, before quite a sharp rebound.
Evy Hambro, manager of IC Top 100 Fund BlackRock World Mining Trust (BRWM), believes the recent fall in the price of gold was driven by paper transactions with some significant shorting. However, he also says there has been significant demand for physical gold, especially in Asia, which has been outstripping supply and will hopefully result in a price recovery.
Read more on Evy Hambro's views
Read last week's cover story on Is it over for gold?
A number of investment trusts have exposure both to gold mining company shares and gold bullion, and with gold being quite a significant proportion of some of these trusts' assets, it will have resulted in some material impact on returns in recent weeks, according to Oriel.
Oriel has drawn up a list of trusts where their exposure to gold is in excess of 6 per cent. "Identifying which trusts own gold bullion is quite difficult as the disclosure as to whether bullion is held, or gold mining company shares are held, can be quite difficult to assess," said Iain Scouller, head of the investment funds team at Oriel. "However, it appears that at least five funds own gold bullion or bullion exchange traded funds."
These are: IC Top 100 Funds Personal Assets (PNL) with 12.7 per cent, Ruffer Investment Company (RICA) with 6.5 per cent and RIT Capital Partners (RCP) with 5 per cent, as well as Golden Prospect Precious Metals (GPM) with 10.5 per cent and New Star Investment Trust (NSI) with 4.6 per cent.
Read more on Do physical gold ETCs hold enough gold bars?
Investment trusts with high gold exposure
| Trust | Exposure to gold (%) |
| Altus Resource Capital | 70.9 c |
| Golden Prospect Precious Metals | 64 d |
| Utilico Investments | 23.2 c |
| City Natural Resources | 22.8 c |
| Personal Assets | 17.5 b |
| New Star Investment Trust | 13.7 c |
| Baker Steel Resources Trust | 12.3 a, b |
| Canadian General | 11.5 a, b |
| Ruffer Investment Company | 10 b |
| BlackRock World Mining | 8.9 c |
| RIT Capital | 8 a, b |
| Prosperity Voskhod | 6.6 a,b |
| BlackRock Commodities Income | 6.2 c |
| HSBC Global Mining Index | 21.1 |
Source: Oriel Securities
a) Oriel Securities estimates
b) Percentage of net assets
c) Percentage of assets under management
d) Percentage of gross assets
