Friday, January 8, 2010

Another entrant into the gold-fund sector

Canada's Mackenzie Financial, following in the wake of Sprott Asset Management, has announced a new gold fund. The Gold Bullion Class fund will "invest 80 to 100 per cent of its assets in gold bullion or gold certificates. It can also invest in precious metals like silver, platinum or palladium, and stocks of companies that produce or supply precious metals."

What's interesting about this trend is that these new funds are devoted to physical gold or its equivalent. As the article states, Mackenzie already has a gold-stocks fund. The public's appetite is whetted for physical gold, but not for mining stocks. As this weekly chart of the AMEX Gold Bugs Index shows, a basket of mining stocks - meaning, producers - has not exceeded the '08 high.

What this means for gold stocks vis-a-vis gold? For a cynic, it only means one thing...

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