Midas MarketScope

ROCHESTER, NY – December 20, 2023

Prices as measured by the consumer price index (CPI), increased 3.1% year over year in November 2023, compared to a 3.2% year over year increase in October 2023. Yield on the 10 year treasury fell to below 4% in the week ending December 15th 2023 after rising to 5% in mid-October 2023. Since then, equity markets, as measured by the S&P 500, responded positively. The price of the S&P 500 index increased 15% from late October 2023 through mid-December 2023. Federal Reserve Board members and Bank presidents expect that the Federal funds rate set by the Federal Reserve to decline in 2024 and 2025 in response to inflation possibly moderating. The same group also expects lower economic growth in 2024, with GDP growth projections changing from 1.5% in September 2023 to 1.4%. Lastly, possibly a consequence of a weaker dollar, gold prices have remained around $2,000 for the month of December 2023. Falling interest rates and a weakening dollar may be seen as a positive sign for gold prices.

Midas Fund (ticker: MIDSX): The Fund’s holding of Resolute Mining Ltd., an Australian gold mining company with operations Africa, performed well in the past month. Shares of SSR Mining, Inc., a gold and silver mining company with operations in several countries, underperformed in the past month.

The Fund seeks primarily capital appreciation and protection against inflation and, secondarily, current income.

Under normal circumstances, in pursuit of its investment objectives, the Fund’s investment strategy is to invest principally in (i) securities (e.g., common and preferred stocks, bonds, convertible securities, etc.) of companies primarily involved, directly or indirectly, in the business of mining, processing, fabricating, distributing or otherwise dealing in gold, silver, platinum, other precious metals, or other natural resources (“Natural Resources Companies”); and (ii) gold, silver, and platinum bullion and coins; provided, however, that the Fund’s investment adviser, Midas Management Corporation (the “Investment Manager”), may invest in any type of equity security (e.g., common and preferred stocks) and in companies of any size, industry or sector, including both domestic and foreign companies, that the Investment Manager believes may achieve the Fund’s investment objectives. Up to 35% of the Fund’s total assets may be invested in fixed income securities of any issuer, including U.S. government securities, of any credit quality or maturity, although the Fund has no current intention of investing more than 5% of its total assets in fixed income securities rated less than investment grade (also known as “junk bonds”). The Fund concentrates its investments by investing at least 25% of its total assets in Natural Resource Companies.

Midas Magic (ticker: MISEX): The Fund’s position in Enova International Inc., a consumer lending company, performed well in the past month. The Fund’s holding of AutoZone, Inc., an automotive parts and accessories retailer, hindered the Fund’s performance in the past month. Each of Mastercard Inc. Class A and Alphabet Inc. Class A currently comprise more than 20% of the Fund’s net assets.

The Fund seeks capital appreciation. Under normal circumstances, in pursuit of its investment objective, the Fund may invest in any security type (e.g., common and preferred stocks, bonds, convertible securities, etc.) and in companies of any size, industry, sector, including both domestic and foreign companies.  Relative to the S&P 500, the Fund’s portfolio currently is more weighted in economically sensitive sectors, such as communications, and cyclical sectors, financial services, and is underweight in defensive industries, such as utilities. 

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.