Thursday, 25 April 2013

Gold and Precious Metal Investment via Unit Trust

The dip in gold price finally stalled with the price of gold hovering at USD1400/ounce range for the past one week. While no one is able to predict the movement of gold price which have been rather volatile, here are some points from the Reuters dated 25th April 2013 that might give us an idea on what to expect for the future of gold:

Ø Gold rose on Wednesday as solid physical demand encouraged speculative buying

Ø Support also came from weak German economic data which fanned speculation that the ECB could cut interest rates

Ø Premiums for gold bars soared to multi-year highs in Asia after a spate of physical buying ran down supplies

Ø This comes as long-term fundamentals for gold remain intact

Ø A pick up in manufacturing activity & an improving global economy should help the demand for precious metals to recover

If and I mean IF the demand for gold were to rise as investor's confidence return, this is certainly an opportunity to invest into. Apart from purchasing physical gold or paper gold, investors can now invest into gold mining companies via unit trust as well! With rising demands coming from China and India, gold mining companies are certain to benefit from the gold craze once again.

In this post, I will be taking a look at AmPrecious Metals Fund, a feeder unit trust fund that invest in a portfolio of global Shari'ah observant equity and equity related securities of companies engaged in activities related to gold, silver, platinum or other precious metals.

The AmPrecious Metals fund is suitable for investors whom:
  • seek a global investment strategy that conforms to Shariah principle
  • seek medium to long term capital appreciation
  • want to invest in gold, silver, platinum, and other precious metal equities, and their related equities
AmPrecious Metals
Fund Background
  • Fund Category : Feeder (Islamic Global Equity) / Capital Growth
  • Fund Launch Date : 15 November 2007
  • Fund Launch Price : RM1.00/unit
  • Fund Size (as of 28th Feb 2013) : RM455.88 million
  • Fund Investment Strategy : Minimum of 95% of the Fund's NAV will be invested in the Target Fund (DWS Noor Precious Metals Securities) which is denominated in USD
Fund Holdings
Top 10 Fund Holdings as of 28th February 2013:

Sector Allocation as of 28th February 2013:

Fund's Country Allocation as of 28th February 2013:

Fund Performance
Cumulative Fund Performance as of 28th February 2013:

Annualized Returns as of 23 April 2013:

Actual Annual Returns Year to Year:

IME Fund Review
AmPrecious Metal fund is a feeder fund that invest their assets into a mother fund by the name of DWS Noor Precious Metals Securities. Simply said, the fund performance is dependent on DWS Noor Precious Metals Securities performance. 

In view of the latest drop in global gold price, the fund price for AmPrecious Metal fund has also suffered a major drop as shown below:

Current Fund Price as of 24 April 2013: RM0.4465 / unit
Fund Price all time Low: RM0.40 / unit
Fund Price all time High: RM1.19 / unit

Despite the current fund price being close to the all time low, investors should be aware that the all time low price is also caused by the recent dip in gold price. Hence this does not rule out the possibility that if global gold price were to suffer further drop, so would the unit price for this fund continue to breach its all time low.

On the contrary, with AmPrecious Metal fund price at an all time low, investors are given the opportunity to buy in and accumulate more units. Being a Syariah compliant fund, Muslim investors can also invest into the fund.

In conclusion, the AmPrecious Metal fund is a high risk investment unit trust fund. Investors must take into consideration of the risk involved. The recent major drop of gold price within a short period of time indicate how volatile the price of gold can be.

Cheers and Happy Investing!

P.s : For further inquiries, feel free to e-mail me at

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