Ascenta Bullion Plus grows 7.30% in Aug as mining stocks rally
Ascenta Bullion Fund was able to post gains onthe strength of its stock holdings in Barrick Gold, Newmont, AngloGold Ashanti and Goldcorp. AngloGold and GoldCorp have been trading above their 50-day moving averages offlate.
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After a difficult first half for both physical gold and mining stocks, the second half of 2013 has already witnessed a turnaround in the industry which in turn has benefitted Ascenta Bullion Plus Fund whose value has grown 7.30% in August, according to Alan Manzie, Investment Advisor for the fund.
Ascenta Bullion Fund was able to post gains onthe strength of its stock holdings in Barrick Gold NYSE:ABX), Newmont, (NYSE: NEM) AngloGold Ashanti (NYSE:AU) and Goldcorp (NYSE:GG) AngloGold and GoldCorp have been trading above their 50-day moving averages offlate.
All these stocks are off from their recent highs but still in positive territory. ABX is down from high of $21.20 per share to $19.41, NEM is down from high of $34.27 tl $31.62, GG is down to $30.03 from recent high of $32.15, AU is down to 13.63 from high of $15.12/share.
Alan Manzie said that first half of 2013 was difficult for the mining industry as they had to account for increased taxes in various regions, increased labour costs,exploration costs and decreasing precious metal prices that led to huge write downs and in turn affected the value of holdings held by Ascenta Bullion Plus Fund.However, despite the sharp decline, followed by a turnaround in mid-2013 and subsequent market recovery, Ascent Fund was patient with its investments collecting dividies and raising its cash component ot 12%.
Fresh investmentsNow Ascenta Fund's cash holdings have fallen to 5% on new equity investments in Franco Nevada (NasdaqGS: FRAN), Silver Wheaton (NYSE: SLW) and additional investments in Barrick Gold. SLW is down form high of $29.17 to $26.13 per share while FRAN is down to $17.79 from high of 24..59.
"All our companies have significant production with the potential to add to reserves in the coming years. Debt levels are manageable and declining, management teams are experienced and capable. Most of the businesses are in the business friendly environment."
"We plan to avoid the exploration and development companies as the risks are high and window for financing these ventures is closing or has closed," Alan Manzie said.
Going ahead, Ascenta Bullion Plus Fund will outperform other sectors as gold prices are set to remain positive on growth in money supply in Japan and China and elsewhere despite talk of US Fed tapering to happen soon. This coupled with tensions in the Middle East continue to benefit precious metals, he added.