Diversification is one of the major benefits precious metals provide to a portfolio. This is because their value tends to appreciate when the dollar is in the doldrums and also when stocks are facing choppy weather. Mutual funds focusing on precious metals are a cost effective method of investing in these commodities. In fact, their expense ratios are lower than those incurred by other investments, as well as most mutual funds. They also save investors the inconvenience of having to individually study companies from the sector. This is why mutual funds are the easiest and safest way to invest in precious metals.Below we will share with you 5 top rated precious metals funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all precious metals funds, then click here.
Rydex Precious Metals (RYPMX) invests in domestic precious metals companies. The majority of its assets are used to purchase equity securities and derivatives. It is non-diversified and seeks capital growth. The precious metals fund has a three year annualized return of 4.32%.
The precious metals fund has a minimum initial investment of $2,500 and an expense ratio of 1.28% compared to a category average of 1.49%.
USAA Precious Metals and Minerals (USAGX) seeks protection against inflation and long term capital growth. It invests the majority of its assets in domestic and foreign companies with primary operations in the precious metals sector. It is non-diversified and has a ten year annualized return of 28.06%.
Mark W. Johnson is the fund manager and has managed this precious metals fund since 1994.
Midas (MIDSX) invests at least 65% of its assets are invested in companies involved in the mining, processing and distribution of precious metals. Up to 35% of its assets may be invested in companies deriving a share of its revenues from the precious metals sector. It is non-diversified and a no load fund.
This precious metals fund returned 24.73% in the last one year period.
Franklin Gold & Precious Metals A (FKRCX) seeks capital appreciation by investing in gold and precious metals or companies involved in mining or processing of these metals worldwide. The precious metals fund returned 27.25% in the last one year period and has a five year annualized return of 26.41%.
As of March 2010, this precious metals fund held 78 issues, with 6.30% of its total assets invested in Randgold Resources, Ltd. ADR.
Van Eck International Investors Gold A (INIVX) invests the majority of its assets are invested in companies whose major operations primary operations consist of activities related to gold. It also invests in financial instruments which are backed by gold and in gold coins and bullion. The precious metals fund has a five year annualized return of 30.05%.
The fund has a minimum initial investment of $1,000 and an expense ratio of 1.43% compared to a category average of 1.49%.
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