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Adrian Ash

Adrian Ash

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is…

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Wall Street's Best Bet for Crisis-Beating Returns

So how did the top US mutual funds stack up vs. the gold price since 2007...?

Past performance is no guide to the future. But if you don't study history, just what will you track instead?

December 2011 marked the fifth anniversary of the end of Ownit Mortgage Solutions - a small lender in the big scheme, but "maybe the canary in the coalmine," according to one mortgage-backed security manager back at the end of 2006.

Let's hope he found a new career in short order. Because come March 2007, tittle-tattle claimed that distress was spreading from the subprime collapse to US and Eurozone hedge funds. In July, news leaked and then broke of the collapse of two hedge funds at Bear Stearns, and the permanent emergency had begun.

What fun lay ahead! With the gold price at just $650 per ounce too! Silver was knocking around $13 the ounce. Together, that's made for quite the track record since...

The Top US Fund Managers: Annualized Returns in Per Cent
  Silver¹ Gold No. of funds beating top precious² Top US mutual³ Top fund's return Ave. fund return
10 years 20.08 19.00 11 USAGX 27.01 0.63
5 years 16.92 20.03 1 OSFDX 40.68 0.63
3 years 37.54 21.88 7 OSFDX 67.57 11.64
1 years -8.00 11.65 195 GVPIX 44.31 -1.99

¹ US Dollar precious metals prices from the LBMA, periods ending 30/12/2011.
² Fund count by BullionVault, using Lipper data via WSJ Online.
³ Single-best fund, best return & average return of all mutual funds taken from MorningStar.

USAA Precious Metals & Minerals you probably know. Co-manager Mark Johnson stepped down last month, leaving Dan Denbow to continue running the single-best performing US mutual of the last 10 years. Other big precious-metal miner funds pack the list of 11 mutuals to outperform silver and the gold price.

GVPIX you might expect to know too, what with it delivering 44% returns in calendar-year 2011. ProFunds US Government Plus led a bunch of long Treasury-bond portfolios. The old Lehman's TLT tracker returned 34% - who needed active management, let alone risk, last year?

But the stand-out fund over both the last 3 and the last 5 years? The only mutual to beat gold for US investors since the eve of this crisis is Oceanstone. Don't feel hard cheated if you've never heard of it. Apparently it's got less than $15 million in assets, even though the minimum investment is $3,000. Its stellar 5- and 3-year records include a ridiculous 264% made in 2009, just from doing what it does - seeking value in common stocks on the NYSE.

Yes, it can be done. And yes, it could be done too. US investors really could beat gold since the alarm bells rang out at the turn of 2007. Because out of the 7,500 separate funds available - with 22,000 shares classes to choose from - one fund managed it. Just like 7 funds (go on, count 'em) managed to beat silver since the turn of 2009, and fully 11 separate US mutual funds managed to beat silver since the start of 2002.


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