It is becoming abundantly clear that some managed funds in the PM sector are having excessive investor money siphoned off into the pockets of the manager(s). For example, if a top performing stock in USAGX or UNWPX is bought, over time it is outperforming the fund by a large percentage. Of course critics will state that placing too much into one stock is a mistake, in the event that some untoward event causes it to suddenly and drastically underperform. So what is the point of buying into a managed fund, in what seems to be the mistaken view that it will be managed better than what can be done by an individual investor? Shouldn’t professional management be more capable of spreading risk with a basket of well researched PM stocks and thus getting better performance than that of a novice investor? It will be granted that managing a portfolio for many investors does not allow for a lot of rotation into better performing stocks. However, looking at top ten holdings reveals that some in the portfolios should be dropped in favor of better performing PM mining stocks, if managers are doing their job of identifying them.
In the case of two funds, USAGX and UNWPX, one of the top performing stocks is Yamana (AUY). Interestingly both of these funds have the same top ten stocks in their portfolio, and are within walking distance of each other. You can read into that whatever you wish, but the fact is that over 1 year both are nearer the bottom than the top of the sector they reside in. UNWPX is down by -37.39%, and USAGX is down by -30.54% according to Morningstar, Equity Precious Metals: Total Returns. In contrast, Yamana (AUY) was priced at $13.66/share 1 year ago, and today is $13.57/share. That is less than a 1% loss. If that is the capability of professional management, who needs it?
Further, the expenses of UNWPX are 1.67%/share, and of USAGX 1.15%/share, according to Morningstar. First Eagle Gold I, the top performing fund in the sector over 1 year has expenses of 0.95%/share, which is less than USAGX by 21%, and less than UNWPX by 76%. This supports the criticism of others that the USAGX and UNWPX managers (who are next door to each other) are not taking care to keep their expenses low, while at the same time seeing to it that their funds are performing well over 1 year. One year would seem to be a reasonable timeframe to make such an assessment in a volatile sector.
Getting back to the original comparison between AUY and the funds mentioned above the funds have underperformed AUY by about the same percentage that they have dropped in value because AUY’s value has remained about the same over 1 year. AND THAT IS PROFESSIONAL MANAGEMENT? It seems that most who visit this message board could match that by applying themselves, and would gladly accept the same remuneration for their efforts.
I agree, HW! UNWPX managers are not performing, even with their dividends ( annually in Dec)! With loss of 35% , wonder if we should get out now, or wait till next Dec. , after the dividends, any advice from anybody?
I'd get out before the dividend so you don't have to pay taxes on it. The fund seems to go down every January. You are paying almost 2% for US Global to lose your money. Compare the performance of UNWPX to GDX!
I've been in this fund since 2006 and it is quite clear to me that Frank Holmes is a terrible fund manager. I will be pulling out shortly just hoping for it to go up a little more to get my original investment back. I wouldn't even consider any other of their funds. I'm doing much better in my individual stock portfolio, which I pick, by far than letting them invest my money.