Midas MarketScope

December 17, 2021

         Thomas Winmill                   Portfolio Manager

Growth stocks are often said to perform well during times of low-interest rates, Given mounting inflation currently, however, investors in growth stocks might have concern. Inflation brings an increased probability of higher interest rates and higher bond yields, lowering the present value of future cash flows an investor might expect from growth investments. Meanwhile, other investments such as bonds and stocks of companies currently generating large positive cash flows may become more attractive. With the Federal Reserve Chairman, Jerome Powell, saying “it’s probably a good time to retire that word [transitory]” with regards to inflation, market expectations of a possible interest rate hike have increased. For instance, traders in the fed funds futures market are now pricing in a rise in interest rates for the September 2022 contract. However, while institutional investors appear to be positioning into value-oriented sectors, individual investors are seemingly still piling into growth stocks. According to the Wall Street Journal, “18 of the stocks that are most favored by individual investors…trade on average at nearly 13 times their trailing 12-month sales.” For comparison, stocks in the S&P 500 trade at an average of three times sales.

Midas Fund

The Fund’s holding of SSR Mining, a gold and silver producer with operations in the United States, Turkey, Canada, and Argentina, performed well in the last month. Shares of Endeavour Mining plc, a large West African gold producer, have underperformed in the last month.

The Fund seeks primarily capital appreciation and protection against inflation and, secondarily, current income through investments primarily in precious metals mining and other natural resource companies, as well as gold, silver, and platinum bullion. The Fund currently is invested in a global portfolio of primarily large and medium gold and diversified mining companies, precious metals royalty companies, and ETFs holding gold and silver bullion.

Midas Magic

The Fund’s position in The Home Depot, Inc., the largest home improvement retailer in the United States, performed well in the last month. The Fund’s holding of Williams-Sonoma, Inc., a retail company that sells kitchen-wares and home furnishings, hindered the Fund’s performance in the past month. Each of Mastercard Inc. Class A and Alphabet Inc. Class A currently comprise more than 10% of the Fund’s net assets.

The Fund seeks capital appreciation. Relative to the S&P 500, the Fund’s portfolio currently is more weighted in cyclical companies, such as financial services, and is underweight in economically sensitive and defensive industries. The Fund generally focuses on companies that appear to have strong operations showing superior returns on equity and assets with reasonable valuations.

How to Invest in Gold?

Three alternatives investors often consider when seeking the advantages of gold are gold bullion, stocks of gold mining companies, and funds that invest in gold and gold-related securities, such as Midas Fund. Using a disciplined approach, Midas Fund seeks to emphasize gold and other natural resource companies offering financial strength, expanding production profiles, strong free cash flow, and promising exploration potential. The Fund’s portfolio is focused on what we believe to be some of the best companies in the sector and so we view Midas Fund as currently well positioned to seek capital appreciation and protection against inflation.

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Cautionary Notes

This release may contain certain “forward looking statements” as defined under the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” “may,” “should,” “plan,” or the negative of such terms, and similar expressions identify forward looking statements, which generally are not historical in nature. Forward looking statements are subject to certain risks and uncertainties that could cause actual results to materially differ from a Fund’s historical experience and its current expectations or projections indicated in any forward looking statements. These risks include, but are not limited to, equity securities risk, corporate bonds risk, credit risk, interest rate risk, leverage and borrowing risk, additional risks of certain securities in which a Fund invests, management risk, risks related to the negative impacts from the continued spread of COVID-19 on the economy and broader financial markets, and other risks discussed in each Fund’s filings with the Securities and Exchange Commission. You should not place undue reliance on forward looking statements, which speak only as of the date they are made. Each Fund undertakes no obligation to update or revise any forward looking statements made herein. There is no assurance that each Fund’s investment objectives will be attained.

Certain information contained herein has been obtained from third parties. While the Funds believe such sources are reliable, the Funds cannot guarantee the accuracy of any such information and does not represent that such information is accurate or complete.