Our long-term model investment portfolio holds a number of specialized precious metals and mining funds, suggests Michael Murphy, editor of New World Investor.
Sprott Gold Miners Exchange-Traded Fund (SGDM) is a fund of large, better-quality gold-mining companies. Because their profit margins expand so dramatically as the price of gold rises, the miners should outperform the metal in the next upturn in gold.
ALPS Sprott Junior Gold Miners Exchange-Traded Fund (SGDJ) is a fund of smaller gold-mining companies, with major holdings like B2Gold, Centerra Gold, Alamos Gold, Pan American Silver, Hecla Mining and First Majestic Silver. The advantage of buying SGDJ is in avoiding the “hole in the ground with a liar standing next to it” syndrome in the junior gold area.
Sprott Physical Gold and Silver Trust (CEF) is an open-fund holding gold and silver bullion. It is for those who want to hold the metals instead of the miners and can do so in a tax-advantaged account.
Global X Silver Miners Exchange-Traded Fund (SIL) is the fund of silver-mining companies. The advantage of buying SIL is that silver usually outperforms gold in a precious metals bull market.
The Top 10 holdings include Industrias Penoles, Silver Wheaton, Fresnillo, Pan American Silver, Tahoe Resources, Polymetal, First Majestic, Hecla and Coeur d’Alene.
