| Fund Company | RBC Global Asset Management |
| Fund Type | Precious Metals Equity |
| Rating | C |
| Style | Mid Cap Growth |
| Risk Level | Very High |
| Load Status | No Load / Optional |
| Manager | Chris Beer since March 2003 Brahm Spilfogel since April 2007 |
| MER | 2.14%$ |
| Code | RBF 468 – No Load Units RBF 774 – Front End Units RBF 865 – DSC Units |
| Minimum Investment | $500 |
Analysis: If you are an investor with a strong appetite for risk looking for a precious metals fund to add to your portfolio, then this is definitely one to consider. It is managed by the team of Chris Beer and Brahm Spilfogel who for companies that are run by experienced management and have strong balance sheets, and proven reserves or excellent geological potential. They look for companies involved in both exploration and production.
Typically, the fund will hold approximately a third of the assets in a select group of high quality, liquid, large cap names which are selected using the resources of the RBC Global Asset Management Team. For the balance, the team looks for small and mid cap names, conducting intensive research, looking to uncover new and unknown investment candidates.
The result is a portfolio that will typically hold more than 100 individual names. Despite the breadth of names, there is significant concentration with the top 10 making up roughly half of the fund. The managers are active in their approach with portfolio turnover levels averaging 90% per year.
Performance, while disappointing on an absolute basis, has been strong compared to other precious metals funds, particularly over the long term. Volatility is very high. On a historic basis, the volatility is more than two times the volatility of the broader market. We do not expect that to change. But within the precious metals category, this has been one of the least volatile funds and has consistently delivered above average risk adjusted returns.
While some exposure to gold may be beneficial to a portfolio over the long term, this is a category that most conservative or balanced investors will want to take a pass on. The outlook for gold is far too uncertain at the moment. With economic growth expected to be modest at best, inflation fears are well contained. In the U.S., the Fed has stated that it will begin to remove the stimulus in an ordered manner, which should help to keep future inflation in check. With that as the backdrop, I believe that the risks to gold are to the downside and more volatility is expected.
Under that backdrop, I believe that the volatility and probability of a loss is significant and far too high for most investors who would have an average risk tolerance. However, for high risk investors looking for exposure to the precious metals sector, this is definitely a fund worthy of consideration.