By: Lawrence Williams
August 18, 2014
Two of the biggest names in hedge fund investment appear to remain positive on gold with the Soros Fund buying into gold mining stocks and John Paulson retaining his top position in the GLD ETF.
The latest quarterly filings by major hedge fund managers raise some interesting facts regarding interest by some of the biggest names in the sector – notably George Soros and John Paulson – and their attitudes towards gold and gold stocks.
George Soros’ Soros Fund Management, according to a Reuters report, nearly doubled its stake in the Market Vectors Gold Miners ETF to 2.05 million shares valued at $54 million at the end of the second quarter, compared with 1.16 million shares in the first quarter. The Soros Fund also initiated new gold investments including 1.33 million shares in call options of the Gold Miners ETF valued at $35 million, and 1 million equity shares in Allied Nevada Gold Corp., but notably cut back its stake in Barrick Gold sharply by more than 90% which suggests that the Fund sees better value in more volatile gold stocks than in the perhaps likely more pedestrian progress of a gold major should gold prices continue to rise.
Perhaps less surprisingly, John Paulson, who has remained committed to gold as a long term investment for his fund through thick and thin retained his 10.2 million shares in the GLD ETF, which was worth some $1.31 billion alone and is the largest single position in the world’s biggest gold ETF. Paulson is a known long term gold bull and his gold oriented fund suffered through the downturn, but will have gained some $45 million during the past quarter.
Although gold and gold stocks have received a lot of talking down by the media and the banks this year, they have provided some of the best market growth so far, in part due to geopolitical issues which have supported the gold price despite the seeming plethora of adverse market commentaries. There has been an element of riding the Dow, the S&P, FTSE, Dax etc, which have all been performing well, but so have the gold stock indices as investors have returned. Gold itself is up around 8% since the beginning of the year compared with say the S&P 500 which is only up just under 7% – fact which seems to be overlooked by many market commentators.
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