I gave up on mutual funds in the late nineties when I realized that most fund managers couldn’t beat the indexes and a matter of fact most don’t try. The amount of risk necessary to significantly outperform the benchmark is not in their best interest. Mutual fund companies maintain their beautiful buildings and well paid staff with the exorbitant fees paid by their customers. The risk of an out-performance strategy failing and resulting in lost customers is too high. So, most are content with being average. That’s good for them, but not for my money.
ETFs have since become a large part of my investment strategy. They provide the diversification of mutual funds without the costs. However, on occasion a rare bird can be spotted in the mutual fund industry. I believe that U.S. Global Investors – USERX fund is one. Year to date the Fund is up 38.9% and its annualized return as of 3/31/06 was 87.74%.
U.S. Global just released its Summer 2006 Shareholder’s Report. It is an excellent read.
Here is a link to the presentation:
If you prefer to download pdf:
Note: No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.