MILLBROOK, NY – March 23, 2022
Inflation increased dramatically over the last twelve months. The Consumer Price Index (CPI) increased 7.9% – the highest rate since January 1982, when the country was facing a recession. Meanwhile on an unadjusted basis, the Producer Price Index (PPI) for final demand moved up 10.0 percent for the 12 months ended in February. At the same time, in February the U.S. consumer sentiment fell to 62.8, its lowest level in a decade according to the University of Michigan Surveys of Consumers. The survey mentioned that among household with incomes of $100,000 or more, nearly half expected declines in their inflation adjusted income in the next year. Although many economists had expected inflation to gradually lower as countries moved away from pandemic era spending and supply chain issues were resolved, the conflict in Ukraine appears to have disrupted that hope. Meanwhile, commodities have spiked to start the year with the price of gasoline increasing around 40% year-to-date and gold around 9% per ounce.
Midas Fund The Fund’s holding of Sandstorm Gold Ltd., a gold royalty company with a portfolio of 230 royalties on mines around the world, performed well in the past month. Shares of Dundee Precious Metals Inc., a Canadian mining company with operations in Namibia and Bulgaria, underperformed in the past month..
The Fund seeks primarily capital appreciation and protection against inflation and, secondarily, current income 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 Barrick Gold Corp., one of the world’s largest gold mining companies, performed well in the past month. The Fund’s holding of Altice USA, a cable television, internet, and telephone service provider, 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 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.