Precious metal fund
The Oppenheimer Gold & Special Minerals Fund – Class A (OPGSX), an alternative mutual fund, aims to grow capital through exposure to equity stocks (VFINX) of companies that are associated with gold and other precious metals. OPGSX is classified as an alternative mutual fund because it directly invests in gold, commodities, and gold-related securities, unlike traditional mutual funds. Gold is a traditional global asset as it can serve as a potential hedge against the consequences of unforeseen macroeconomic events that lead to losses. The Philadelphia Gold and Silver Index acts as the primary benchmark for OPGSX.
The chart above compares the historical performance of OPGSX with the Philadelphia Gold and Silver Index at the end of December. The Philadelphia Gold and Silver Index is comprised of thirty precious metals and mining companies that are traded on the Philadelphia Stock Exchange. As shown in the graph above, both OPGSX and its benchmark have fallen sharply due to the bearish trend in the metals and mining sector.
The top holdings of the fund include gold-related securities such as Goldcorp (GG), Agnico-Eagle Mines (AEM), Tahoe Resources (TAHO) and Royal Gold (RGLD), among others. The fund is managed by Shanquan Li from OppenheimerFunds. Dividends are a major source of income for investors of such alternative funds. At the end of December, the fund had a net dividend yield of 1.3%. The next article of this series gives a more detailed look at the holdings of OPGSX.