gold funds

[watchesandwhisky]

I am looking for a fund for regular monthly savings of £100 with a long term investment timescale, at least ten years. Do you have any recommendations? I am with Hargreaves lansdown and this is the one im currently considering.

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/b/blackrock-gold-and-general-class-d1-accumulation

Id also be interested in funds with more of a mix of metals too.

[richo]

Smith & Williamson global gold is one I used to be in. I might restart it actually.

[nr73]

How do these type of funds work (layman's terms)?

[richo]

They invest in a basket of equities linked to gold production, bit of physical and a few other things. I think the one I mentioned has a large weighting to Canadian miners.

[KDave]

The blackrock fund is nice, well diversified, annual charge is very low when historic dividend yield is considered.

It contains silver miners too so you get some exposure to other metals already. Newcrest mining is the biggest holding of the fund, also my biggest holding of the gold miners in my ISA, might have to get involved with this fund instead.

Just now, richo said:

They invest in a basket of equities linked to gold production, bit of physical and a few other things. I think the one I mentioned has a large weighting to Canadian miners.

Most gold miners are listed on the Toronto exchange but this has often nothing to do with the locations of their mines. Its a bit like the UK stock exchange and the FTSE 100, almost all are multinational companies and not much to do with the UK.

[watchesandwhisky]

Cheers Richo I will have a look at that one. 

I thought it looked pretty good to KDave, whilst I feel starting a fund now when it has already seen massive gains this past year is a bit risky, in the long term as long as i am making £100 payments each month via HL regular savings plan - it will even out over the years as i get more when gold dips. Thats good to know there is some silver miners in there too! 

[watchesandwhisky]

Also, do you go for accumulation or income? 

[richo]

Nearly always accumulation.

regular savings are great and help smooth buying in at what might be a high.

[watchesandwhisky]

I think for a long time frame accumulation seems the logical choice, especially if you are relatively young - Im currently 33 so potentially have over 30 years saving.

I have £100 a month, now I just have to decide what funds to put it in, £25 per fund per month is the minimum so I could spit it between four funds if i wanted too..

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/j/jpm-emerging-markets-class-b-accumulation

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/s/schroder-small-cap-discovery-class-z-accumulation

Might split it 3 ways between the Black rock gold fund and these two. or possibly £50 too blackrock and £25 to each of these. 

[Roy]

Have you looked into a helptobuy ISA buddy?

Just an idea 

https://www.helptobuy.gov.uk

[watchesandwhisky]

Cheers for reminding me Roy, I had heard about them but haven't looked into them to far. Will check the scheme out:)

[Roy]

Looks like a fantastic offer to me.

Unfortunately, in this case, I'm not a first time buyer and I'm too old anyway!

I believe KDave has 1 (or 2) perhaps he can advise?

A good bonus and your money is safe, as safe as houses! 

[Danny-boy]

I was going to use the help to buy scheme, but was scuppered at the final hurdle.

I was a first time buyer, but my dad left me his half of the family home when he died a couple of years ago, so I was (on paper only) a home owner.

Ugh

[Roy]

(dislike)

You would think they'd look at each case individually.

Sorry to hear about your father.

 

[Danny-boy]

(dislike)

You would think they'd look at each case individually.

Sorry to hear about your father.

 

Cheers Roy.

I did refer it as high as I could but nobody would side with me.

Kinda glad I didn't now to be honest, it's nice to have done it without any assistance.

[KDave]

5 hours ago, Roy said:

Looks like a fantastic offer to me.

Unfortunately, in this case, I'm not a first time buyer and I'm too old anyway!

I believe KDave has 1 (or 2) perhaps he can advise?

A good bonus and your money is safe, as safe as houses! 

I have a one the missus has one (but I pay into both to max them out) 

HTB ISA's, there is a thread somewhere but to summarise; 

They are nice if you want to build a small cash investment/emergency fund from scratch, with a bonus if you use the money as part of the deposit on a first house. Its basically a long term 4% regular cash saver (interest rate likely to fall after a couple of years of capital build up though I reckon) with an additional 25% 'bonus' on your monthly deposits if you use the money as part of a deposit on a house. Save £25-£200 a month so easily do-able. You don't see the bonus until the house sale is complete so you can't use it as part of the deposit - use it to pay the solicitor fees or get a few celebratory sovereigns/shares in a gold mining fund? 

[Bumble]

Blackrock Gold and General is not your cheapest option. It has an expense ratio of 1%. Also, Hargreaves Lansdown charge an annual fee of 0.45% on funds. If you buy an ETF instead, you can get a lower expense ratio and the broker fee is capped at £45 per year. You might want to consider GDX, which has an expense ratio of 0.53%, or SGDM at 0.57%. SGDM is run by Sprott Inc., which specialises in natural resources investing and is probably more actively managed than the other two. You can check the holdings of these funds with these links:

Blackrock

GDX

SGDM

You will see that Blackrock and GDX are holding all the usual suspects - the biggest gold miners in the world, while SGDM is more selective and weighted towards the stocks they believe will outperform while omitting those they believe are fully priced. Currently SGDM holds no Franco-Nevada, Newmont, Newcrest or Goldcorp, for example, but large holdings in Randgold, Agnico Eagle and Royal Gold.

On a more general note, gold miners are not really a long term hold: they are more what you buy when a bull market in gold is running, with a view to progressively taking profit and shifting it into other assets. At present, we certainly seem to be in the early stages of a bull market for gold, but if gold approaches a blow-off top, like it did in 2011-12, it will be time to dump your gold miners completely. The HUI index of gold miners lost more than 80% of its value between 2011 and 2015 - you don't want to be holding the miners when the bull run is over.

[KDave]

Nice I didn't notice that HGL charge a fee for holding funds as well. So the cost of the fund is as advertised, minus annual dividends, plus HG Annual Fund fee of 0.45% unless you have a great deal of money invested with them. Takes the shine off it a bit.

EFT is the way to go then, similar exposure, less cost, only trouble is I don't think you can do a regular savings plan with an ETF on the platform.