Exploring Three Fund Options for Diversifying Investments With Gold

Gold continues gaining popularity from traders as tensions in the Middle East rise, the economy dwindles, and investors choose to protect their wealth with a secure, safe-haven asset. Unfortunately, investing in physical gold is both expensive and often impractical. So, instead, many gold investors prefer to buy into the gold market with alternative asset options, like gold funds.

Gold funds offer ideal liquidity while still providing exposure to the gold market. Investors interested in gold fund trading have multiple popular options to choose from, including the following:

Ninety One Global Gold

The Ninety One Global Gold fund allows traders to buy stakes in equities issued by gold mining companies from around the globe. The purpose of the fund is to help investors achieve long-term portfolio growth through investing in precious metals. The majority of the fund invests in gold, though around 10% to up to one-third goes toward other precious metals, like copper and silver.

George Cheveley, with over 30 years of experience working in the precious metals and mining industry, runs the fund. Chevely wants to help promising mining operations develop strong cash flows so they can beat their competition.

Nearly half of the Ninety One Global Gold fund is invested in Canadian mining companies, which makes sense given Canada’s mining status. Canada houses nearly half of the globe’s public mining and mineral exploration companies. Aside from the Canadian projects, the fund invests in companies across the globe, spanning from the United States and Australia to the United Kingdom and South Africa.

The Ninety One Global Gold fund offers the flexibility to use derivatives and is concentrated, but both of these factors can add risks.

Between October 2018 and 2019, the fund yielded an annual return of 42.32%. By October of 2020, the return rate came to 40.55%. During 2021 and 2022, the fund yielded negative returns of -18.23% and -11.6%, respectively, before bouncing back with a 14.44% return rate by October of this year.

Troy Trojan

Troy Trojan is another fund aiming to help investors grow their portfolios over long periods of time. The fund invests in assets that help traders limit their losses during economic downturns rather than yield strong returns during all periods.

Troy Trojan has “four” pillars of investment, with gold being one of them. Because of this, gold typically only makes up around 10% of the fund, with managers investing in both gold bullion and gold-related investments. Gold-related investments typically include any types of companies that succeed when the price of gold goes up.

Troy Trojan’s managers often change the fund’s gold investment weight based on current performance rates compared to other assets. The fund offers diverse yet concentrated investing, meaning each individual investment still contributes to the fund’s total returns. Troy Trojan occasionally invests in small companies, which traders should consider when assessing risks.

Troy Trojan may not be a traditional gold fund, but it does offer a diverse introduction to the gold market. Any investors seeking gold exposure with their portfolio diversification strategy may be interested in what the Troy Trojan fund has to offer.

Between October of 2018 and 2019, Troy Trojan gained 6.5%. By October 2020, the fund continued the same pattern, returning 6.57%.

From October 2020 to October 2021, Troy Trojan yielded a 12.15% return before backtracking and hitting a -2.23% return by October 2022. By October this year, the fund yielded a 1.16% year-on-year return.

iShares Physical Gold ETC

The iShares Physical Gold fund is an exchange-traded commodity that allows investors to purchase shares that track the spot price of gold. The iShares Physical Gold ETC only uses gold that follows the London Bullion Market Association Good Delivery rules, keeping investors’ best interests in mind. With this requirement, all gold follows the Responsible Sourcing Programme, helping to support a more sustainable gold industry.

iShares Physical Gold is competitively priced compared to other market competitors, using an ongoing charge of 0.12%. When viewing performance rates of the fund over time, the returns nearly match those of spot gold. Traders should consider that the fund does use derivatives, though.

Between October 2018 and 2019, the iShares Physical Gold fund gained 22.49%, then increased by 24.40% by October 2020. The fund dropped by -11.45 from October 2020 to October 2021, as did the price of spot gold, before increasing by 10.16% by October 2022. This year, the fund has achieved a 15.46% year-on-year gain.

As always, investors should consult their financial advisors before making any portfolio decisions.

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