21 May

Mackenzie Financial Takes On Significant Newmont Mining Exposure

WRITTEN BY Patricia Garner

Mackenzie Financial starts a new position in Newmont Mining

In the first quarter of 2015, around 65 hedge funds created new positions in Newmont Mining (NEM) and over 160 hedge funds added to their positions in NEM, including Vanguard Group. Gold price fluctuation affects gold mining stocks like Newmont Mining (NEM), Kinross Gold (KGC), Barrick Gold (ABX), and Primero Mining (PPP). These stocks account for 20.4% of the VanEck Vectors Gold Miners ETF (GDX).

Newmont’s all-in sustaining cost (or AISC) is benefitting from favorable foreign exchange movements. The US dollar’s depreciation and the increase in crude oil prices led to an increase in gold prices last week. This increase resulted in increased inflation. So investors use gold as a hedge against inflation, which in turn results in rising gold demand. To learn more about the gold price rally, read Market Realist’s article Technical Catalyst: Will Gold Hit $1,225 per Ounce?

Mackenzie Financial Takes On Significant Newmont Mining Exposure

Hedge funds holding NEM

We can see from aggregated 13F data among the funds that added NEM to their portfolios in 1Q15 that, in terms of dollar value invested, Mackenzie Financial ranked eighth. Carmignac Gestion, Becker Capital Management, Sun Valley Gold, and CIBC World Markets occupied the first four slots (in that order).

In this series, we’ll look at Newmont Mining’s performance over the last quarter in order to better understand its current and longer-term drivers. We’ll also examine the payoff on this position year-to-date. We’ll benchmark the stock’s performance against other ways to gain exposure to the gold mining sector.

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