Vanguard Precious Metals and Mining Fund (VGPMX) Investor Shares

Precious metals such as Gold and Silver have become an important portfolio asset for investors. Owning these precious metals directly does involve significant work for retail investors. Using mutual funds, investors can achieve the same investment goal. One of the popular precious metals mutual funds is Vanguard Precious Metals and Mining Inv.

Vanguard Precious Metals and Mining Investor (VGPMX)

Vanguard Precious Metals and Mining

The Vanguard Precious Metals and Mining fund objective is to provide long-term capital appreciation through investment in the stocks of foreign and U.S. companies of metals or minerals. These precious metals companies may involve in the exploration, mining, development, fabrication, processing, marketing, or distribution. The majority of these companies will be mainly involved in activities related to gold, silver, platinum, diamonds, and rare metals or minerals.

Fund Details

• Fund Inception Date: May 23, 1984
• Ticker Symbol: VGPMX
• CUSIP: 921908208
• Beta (3yr): 126.08
• Rank in category (YTD): 2%
• Category: Equity Precious Metals
• Yield: 0.53%
• Capital Gains: 0%
• Expense Ratio: 0.27%  
• Net Assets: $ 4.37 billion
• Number of Years Up: 15 years
• Number of Years Down: 12 years
• Annual Turnover Rate: 34%

Updated on 7/12/2012

This sector mutual fund has low annual expense ratio of 0.27%. The average annual expense ratio in the Equity Precious Metals category is 1.40%. The lead manager of this fund is Graham French. He has been managing this fund since June 1996. This top performer fund has total net assets of $4.37 billion. The dividend yield of this fund is 0.53%. As of March 13, 2012, the fund has annual holdings turnover of 34%.

This equity precious metals mutual fund has 3-stars rating from Morningstar. The analysts have also given it Gold rating. The fund has returned in 15 years of positive return since its inception in 37 years before. It has its best 1-year total return in 2009 with 76.46%. The YTD return of this fund is 12.74%. The fund has returned in 17.13% over the past 10-year and 4.45% over the past 5-year. The 3-year beta of this fund is 126.08.

This mutual fund requires its investor to open a brokerage or IRA account with a minimum first purchase of $3,000. The fund is provided by 77 brokerages like E Trade Financial, JP Morgan, T Rowe Price, Fidelity Retail Funds Network, Schwab Retail, Ameriprise Brokerage, E Trade No Load Fee, Royal Alliance, Raymond James, etc. The benchmark of this precious metals mutual fund is Spliced Precious Metals & Mining. There is no other class beside this Investor share.

Best Precious Metals Mutual Funds of 2012

The top 5 country diversification as of February 2012 is Canada (34.9%), Australia (27.9%), United States (10.9%), United Kingdom (9.9%) and France (5.1%). The 10 largest stock holdings as of February 2012 are Centerra Gold Inc, Newmont Mining Corp, Hochschild Mining PLC, Alacer Gold Corp, Imerys SA, OZ Minerals Ltd, K+S AG, Minefinders Corp, Eldorado Gold Corp and Aquila Resources Ltd. These top ten holdings represent 57.4% of the total net assets.

Primary investing risks include Non-diversification risk, Industry concentration risk, Stock market risk, Investment style risk, Manager risk, Country risk, Currency risk, etc.

Pros & Cons

The goods of this Vanguard Precious Metals and Mining fund are:

• The fund has a gold rating from Morningstar analyst
• It has the lowest expense ratio fee in its category

The bads are:

• It was one of the worst performer funds in 2008
• It is not an index fund

Disclosure: No Position

Other Funds post:

• First Eagle Gold A (SGGDX)
• Central Fund of Canada (CEF)