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Has the Hinde Capital gold fund really outperformed the gold price?

A couple of weekend’s back Ben Davies, the CEO of Hinde Capital was on King World News with Eric King. At the end of the interview Eric King made the following comment:

“Ben, I know right now that you have one of the best performing gold funds in the world year-to-date”

To which Ben Davies responded:

“Well, that’s quite an accolade – I think we are one of the better performing, if not the best performing gold funds at this point. We are having good returns on the year and have been out-performing gold substantially on a twelve month basis.

So we thought we check out these claims. First up who are Hinde Capital and what do they do? From their website:

Hinde Gold Fund maintains a long bias. The Fund offers investors the opportunity to seek the preservation of capital in gold, against the potential erosion of the purchasing power of fiat ‘paper’ money.

The core of the fund’s investment is allocated physical gold stored in secure vaults in a leading Swiss private bank Julius Baer.

The Fund provides exposure to the upside appreciation in the precious metals sector while smoothing out the downside volatility. We reduce and increase allocations to the sector so as to provide an on average constant investment to the gold price. The Fund also has a small allocation to companies engaged in mining, exploration and production in the precious metals sector.

The Fund targets a significant return in excess of its designated benchmark, the USD spot gold bullion price.

So are they the best performing gold fund in the world? Here is their 12 month performance record:

 

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Over the past 12 months Hinde Capital have seen their fund increase in value by 41.18% – this compares with an increase in the price of gold of ‘just’ 24.12%

It’s also worth noting that the 41.18%% figure sighted by Hinde is the actual return to investors after the cost of running the fund have been taken out. This is not a trivial amount when you remember that Hinde charge 1.5% management fee and also take 20% of the profits that the fund generate. So in reality the out-performance has actually been much higher.

Now lets go back and look at 2009 and 2010.

2009:

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2010:

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It’s probably also worth noting that Hinde have managed this performance record while at the same time doing so with less volatility than the underlying (gold). Which in layman terms means they achieved what they have whilst putting their capital at less risk to fluctuations than those who invested in gold itself.

Clearly Hinde have been outperforming the price of gold very successfully for nearly 3 years. But how does this stack up against other funds? A quick look at the GSCI Total Return Fund, the MSCI World fund and the GDM Gold Miners Index show the answer to that is very favorably.

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So the assertion made at the top by Eric King that Hinde is one of the best performing gold funds in the world seems to stack0up upon closer inspection.

Link to this article: : http://www.goldmadesimplenews.com/gold/has-the-hinde-capital-gold-fund-really-outperformed-the-gold-price-5653/

Posted by on Nov 8 2011. Filed under Analysis, Gold News, Markets. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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