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Precious Metal Mutual Funds As A Type Of Generic Precious Metal Fund Precious metal mutual funds can be viewed as one type of the more general precious metal fund. Metal funds can include strict bullion funds (like gold or silver funds) and metal storage programs, ETFs, and mutual funds. Unlike an ETF that tracks physical metal, precious metal mutual funds are more analogous to ETFs that follow an index of mining stocks. Rather than focusing on the metal, they focus on the companies that produce the metal. Precious metal mutual funds are distinct from ETFs that follow a basket of mining stocks in some significant ways. On the down side, they tend to be expensive to own. It’s not uncommon to find an expense ratio of 1.5% or so. ETFs, on the other hand, might be.5% to .7% or so. Also, the mutual funds have to have a daily net asset value calculated, and so you can only buy and sell them at the end of the trading day. There are no real time quote offered, obviously, and you cannot buy put and call options on the mutual fund. It’s also typical for there to be a minimum investment requirement. For instance, some of my favorite mutual funds have a $5,000 entry fee. Aside from the minimum investment, most of these are not really a big problem for the type of customer interested in mutual funds. Opposite the drawbacks, there are some significant positives. A big one is the fact that the mutual fund is actively managed. There is a professional money manager buying and selling the precious metal mutual funds’ holdings. This is drastically different from an ETF that is locked into tracking an index of mining companies. If one of the companies in the index goes south, it will pull down the performance of the ETF anchored to the index. By contrast, the mutual fund manager is able to buy and sell companies as news, developments, and other factors dictate. This active management can make a huge difference in returns. Precious Metal Mutual Funds For Both Large And Small Companies A good choice for producing miners is the U.S. Global Investors Gold and Precious Metals Fund, which you’ll find under the symbol “USERX.” By focusing on existing producers, you minimize the downside risk of a company coming up empty handed and either vanishing or else extending their time horizon to do something spectacular. Of course, you also eclipse the joy of participating in stories of legendary returns that can reach 5,000%, 10,000, and even more than 50,000%. Whether you are looking for precious metal mutual funds holding large producers, or prefer exploration companies looking to land the next world class deposit, you have choices. If you want to get exposure to the smaller explorers, the counterpart fund to USERX is the U.S. Global Investors World Precious Minerals Fund (UNWPX). It’s actually reasonably similar to USERX in that 80% of assets are in larger producers. However, the remaining 20% is allocated to junior resource companies. UNWPX has won numerous awards as one of the top-performing precious metal mutual funds in its category.