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Tocqueville Asset Management, a contrarian hedge-fund firm with $9.4 billion in assets, is top heavy with gold- and silver-company stocks as they make up seven of its 10 biggest holdings.Gold is seen as a safe haven in times of market turmoil and, given the seesawing equity markets, the weaker outlook for the economy and the sovereign-debt crisis, the precious metal has gained 22% this year and is heading for an 11th straight annual gain, the longest streak since at least 1920. Gold rose to a record $1,814.95 an ounce last week and was trading at around $1,740 on Monday.
But gold-mining companies’ shares, as tracked by Morningstar, are down 3% this year.
John Hathaway, Tocqueville’s senior managing director, oversees the hedge fund’s 933-stock portfolio. Its largest holding, at 1.8% of the portfolio and valued at $168 million, is the world’s second-biggest gold producer, Newmont Mining(NEM), which has seen its shares slide 6% this year.
Right behind it in the portfolio is Ivanhoe Mines(IVN), at a $160 million position. The company owns mines primarily in Asia. The stock is also a favourite of Fidelity funds, which own 5.9% of its shares collectively, and Tocqueville Gold Fund(TGLDX), a part of Tocqueville Asset Management, which has a 5.1% stake.
Ivanhoe’s shares are down 9% this year, but are up 23% over the past 12 months.
The fund’s fourth-largest holding is Goldcorp(GG), at 1.3% of the portfolio and worth $118 million. It’s a Canadian-based mining company with operations in Canada, the U.S., Mexico and Latin America. Its shares are up 9% this year and 25% over the past 12 months. Fidelity is another big buyer of this company, with 6.6% of its outstanding shares.
The fourth-largest holding, Silver Wheaton(SLW), is an unhedged paper proxy on silver prices. It purchases silver for sale through long-term purchase contracts from counterparties. Its shares are down 4.3% this year but up 89% over the past 12 months.
Other top-20 fund holdings related to gold mining include: Gold Resource(GORO), Osisko Mining(OSK), Randgold Resources(GOLD) and Atac Resources(ATC), according to the fund’s latest 13F filing at June 30.