UOB Gold and General - An underperforming fund
Readers over at SGFunds would have saw my Rant here that I am particularly disappointed with the management of UOB Gold and General. The Amex gold mining index(HUI) and the XAU have made substantial gains in 2 days of trading amount to 9-10% and this fund, which is suppose to invest in mining companies, have been giving a return of 1% plus.
For anyone who thinks that i am making a big fuss out of this, I don’t think I am. And can provide a reasonable case for this. I don’t think i can be particularly demanding, when if i expect at least a 6-7% gain at least for a 10% move in the index!
I tried justifying for this poor manager within my brain as well, reasoning that probably much more is allocated to commodities and other base metals, thus the underperformance. But i realise these categories are also doing well!
Such are the problems of active management. Funds underperformed the index is prevalent in Singapore. However, this is also a danger. A change in fund manager resulting in severe underperformance.
My Actions
I would most likely switch out of UOB Gold and General fund. The alternatives are FS Global Resource and DWS Noor Precious Metals. I realise that FS Global Resources does not really focus on gold mining companies but broad large cap mining. I am still willing to be invested in this area (Hey at least it doesn’t do a negative move when the commodities gain 2-3%!)
Gold Mining Index is at an inflexion point. It will either continue its consolidation or it will break a new high. We certainly hope it is the latter.
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Comments
Hi there. Not sure if u celebrate CNY but Gong xi fa chai to you.
I’m not really sure now, I have experience with FS, UOB and DWS. I do own a small portion in GDX which is a gold mining ETF listed in NYSE. I would think that UOB AND FS is underperforming that period, which i do not know why. Its not helping that their valuation is on different days where FS is one day late.
As what a forumer at SGFunds points out this ain’t a full fledge precious metals mining fund so don’t expect it to replicate XAU or HUI indexes. However, other mining sector is still doing well so it is really a head scratcher.
Gong Xi Fa Cai to you too.
If what you say is true, and two of our (few) available resource funds are underperforming the index, then what in your opinion is a better way to expose yourself to the commodity market? At least in SG.
I’ve taken a look at Lyxor, but I’m not that interested in futures and the low liquidity isn’t helping it in any way.
Drizzt,
UOB has had solid performance over many years. FS is still pretty new. Was the performance that horrible to make it worth dumping the stock?
A pity we only have so few resource funds to choose from.