The Tocqueville Gold Fund
Dear Fellow Shareholder, Over the past six months, through April 30, 2016, a significant change in market attitude toward gold stocks and gold in general has taken place. During the six-month period, gold rose 13.1% finishing at U.S. $1,290.50 per oz., while the Tocqueville Gold Fund (the “Fund”) returned 53.38%. Comparatively, the Philadelphia Stock Exchange Gold and Silver index increased 81.13%. Gold now appears to have recovered from a bottoming out process that occurred during the second half of 2015, after trending downward for four years. The markets’ assessment of the U.S. Federal Reserve’s interest rate posture weighed on gold at the end of 2015 but gold recovered as markets concluded that after the December increase another rate increase was unlikely, especially as the European Central Bank and the Bank of Japan continued to ease. As the 2016 calendar year got underway, global investors were most concerned that Chinese markets and global economic fundamentals would deteriorate, while oil prices continued a downward trend that began in 2014. During the period, we eliminated or reduced a number of positions, which we thought offered less return potential. We sold Continental Gold and Primero Mining as they faced permitting and tax issues, respectively. Those concerns are likely to impede their stock price performance. Iamgold, Kinross and New Gold were also eliminated as we assessed their capital allocation strategy as less than advantageous to shareholder value creation over the long-term. We reduced the Gold Fields position, as its South African mine continues to struggle and this has become a larger concern for the company’s longterm success. We sold small positions in Cia de Minas Buenaventura and Silvercrest as we determined that such small weightings in those two names are better utilized in several new positions for the Fund—TMAC Resources, NuLegacy Gold, Hochschild Mining and Richmont Mines. We added to Alamos Gold as the pr
I'm somewhat disappointed today that GDX went up 5% while TGLDX went up just 3%. But Tocqueville is made up 14% of gold, and has no holdings in some risky countries, so the results are bound to be different, and probably less. I remember before the 2000 crash that everybody was talking about how risk and reward go together- the more risk the more reward, as though that were a sure thing. Those people got absolutely crushed when risky stocks crashed.