Investors of precious metal funds in Canada will immediately
recognize the proverbial 800 pound giant in the room, when
reading about the Sentry Precious Metals Growth Fund. Last year,
the fund managed a 79 percent return, and in the process picked
up some hardware at the annual Lipper Fund Awards.
Sentry Precious Metals Growth, which posted an average annual
return of 22 percent over three years, earned the award in the
precious metals category, and has the best return of all
categories for that period, also winning awards for both the one
and five year periods.
In an interview with
, Mina Rizk, Product Manager and Analyst for Sentry Investments
was pleased with the awards and the impact that it has
represented for marketing opportunities, "The Fund continues to
attract assets based on its strong and consistent track record.
Including the 2011 awards, the Fund has now captured seven Lipper
Awards over the past five years."
Sentry has been establishing quite a strong name for itself in
the Canadian investment management universe, with the entire
firm's suite of assets under management totaling 80 percent
growth on the year. The growth total is a product of the weighted
average performance across all mandates in addition to the net
sales of the funds. The second highest total for firms with more
than a billion dollars of assets was Dynamic Funds, which posted
a 33 percent gain.
Portfolio management commentary
Portfolio Manager, Kevin MacLean has indicated that he has
been able to reduce risk or volatility in his fund because it is
focused on smaller companies, which can add to existing reserves
and resources, as opposed to large gold producers, whose share
price returns are more dependent upon an appreciating gold price
that is often relatively volatile.
"When the gold price goes down, the senior shares go down and
stay down until the gold price goes up again," MacLean said. "The
shares of smaller companies can go down initially, but they will
come back fast because they are creating wealth by finding it in
the ground." In a sense, these companies are growing the
underlying asset base 'organically'.
While the price of gold had been falling last month after last
year's strong surge, he suggested "The U.S. recovery is almost
driven by printing money," he said. "The United States has
decided to devalue their currency rather than tighten their
belts, so that is bullish for gold." This is also underscored by
escalated geopolitical concerns in the Mideast as well
as supporting data from slightly higher U.S. inflation for the
month of January.
Critical investment features
The fund comes at a slightly higher price point, featuring a
Management Expense Ratio (
) of 2.6 percent of net assets. The MER is a measure of what
it costs an investment company to operate the fund and
consists of a management fee, record-keeping, custodial
services, taxes, legal expenses, and accounting and auditing
costs divided by the average dollar value of its assets
under management. Operating expenses are taken out of a fund's
assets and lower the return to a fund's investors. As a category
benchmark the median MER for the precious metal category is 2.3
The total assets of the fund are approximately $730 million,
which permits the manager to invest in exploration, junior mining
of precious metals. This provides investors with exposure to
international enterprises with the broadest range of market
The competitive nature and industry compliance requires that
the fund disclose financial details quarterly, and the most
recent sector allocation indicates about 56 percent is invested
in junior mine production, 23 percent in mid tier miners, 10
percent in senior miners and 10 percent in exploration
Top 6 fund holdings
These companies represented 60 percent of the fund
Allied Nevada Gold Corp.
Golden Star Resources
Osisko Mining Corp.
Precious Metal Funds: Sentry Precious Metals Growth
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