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How a lump of gold
bullion beat the City of London's brightest and best since 2007...
HOW QUICKLY time flies! The global financial
crisis will mark its 5th birthday in 2012.
And now it's out of short trousers, let's see who coped best with the
terrible toddler so far, starting with the City of London's top fund
managers...
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The UK's Top Funds vs. Bullion:
Annualized Returns in Per Cent1
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1 year
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5 years
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10 years
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Gold2
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16.72
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26.07
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18.18
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Silver
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1.74
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22.44
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20.03
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Best UK fund sector3
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Index-Linked Gilts
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Greater China
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Emerging Markets
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Best sector's average
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13.4
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11.27
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15.23
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Single best-performing
fund4
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Henderson
Long-Dated Gilt
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Quadris Forestry
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BlackRock
Gold & General
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Best fund's gain
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31.63
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17.03
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22.38
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No. of separate funds
beating gold
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38
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0
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3
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1Compound annual growth rate, including
dividends and annual charges
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2Bullion prices from London Bullion Market
Association (16/12/11), storage costs from BullionVault
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3Sector data from Investment Management
Association (12 months to end-Oct)
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4Fund data from MorningStar
(UK domiciled, non-institutional, 16/12/11)
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Many analysts and advisors will rightly tell you to beware chasing
yesterday's winners. But physical bullion has proven to be uniquely suited to
this financial crisis so far.
Over the 5 years to mid-December, gold bullion priced in Sterling
returned 218% net of ongoing storage costs.
Physical silver rose 175% after storage costs.
The best-performing UK-domiciled fund available to retail investors
returned 120% over the same period, including dividends and ongoing fees. Funds in the best-performing sector,
Greater China, averaged just over 70% growth.
Those China equity funds cost an average maximum of 4.6% in upfront
charges. Buying gold or silver on BullionVault
costs a maximum 0.8% in dealing fees.
So why gold and silver – so far, at least – for UK
investors and savers since 2007...? Because they are physical property,
rather than anyone else's financial promise, gold and silver cannot go bust,
unlike Britain's ailing banks or even neighboring
governments across the Channel. Silver and gold bullion are also rare and
tightly supplied, unlike the flood of money from the Bank of England, franctically trying to prop up the UK's banking system.
So despite all the experience and expertise of the UK's fund
management industry, in short, you would have done much better buying silver
or gold on the eve of this crisis than entrusting your savings to the City.
US comparison to follow on Friday.
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