Blackrock Favors Miners Over Gold

In pitting gold verses gold miners as which is the better investment, gold miners win going away, says Britain’s Telegraph…

Think you know what’s in your investment fund? Think again. A growing number of fund managers are looking beyond their traditional hunting ground to boost their portfolio.

For instance, you would be forgiven for thinking that the Blackrock Gold & General fund invests in gold. It doesn’t, well not directly, but investors won’t be disappointed.

It does not invest in the gold price or hold any gold bullion as you may expect, but instead gold and mining equities. This gives the fund greater liquidity and has allowed it to beat the impressive gold price rally over the past five years – the fund has returned 219pc compared with the gold price return of 179pc.

The fund manager Evy Hambro invests up to 30pc of the fund in other mining and precious metals, including platinum and diamonds.

“One fund that has not disappointed investors by not doing exactly as it says on the tin is Blackrock Gold & General,” said Darius McDermott at Chelsea Financial Services.

The article says that “over the past five years – the fund has returned 219% compared with the gold price return of 179%.” Looking at the 5-year return of the gold ETF and the gold miners ETF, gold wins, with an 80% return verses a 20% return for the gold miners. The percentages in the article look very inflated. Plus Blackrock must do a heck of a job choosing its gold miners, unless it was the platinum and diamond miners it chose that made the big difference. Something’s not right here.

Tags: Blackrock, diamonds, GDX, GLD, gold, gold miners, platinum