The First Eagle Gold Fund has gone from being the best-performing gold fund in 2002 to the worst-performing gold fund in the past three months, Reuters reports.
The fund soared 107% but returned 10.2% in the three months ended last Thursday. While the latest return is none too shabby, it still puts the fund at the bottom of the gold fund heap.
- Year-to-date, the fund is up 5.4%, as opposed to an average of 9.4% for its peers. One of the reasons gold has lost its luster is because of the strong comeback in the equities markets in the second quarter, when all three major indices had significant gains. The conclusion of the war in Iraq also helped propel some of those gains. Last year, however, geopolitical tensions around the world prompted some investors to move into gold as a safe haven.
Nonetheless, with bond funds now taking some hits, some believe gold might regain its favor. "What we are seeing now in gold funds is that gold is very, very volatile, among the most volatile holdings in the market," said Lynn Russell, a mutual fund analyst at Morningstar, told Reuters.