USAA Precious Metals and Minerals Fund (USAGX) ?

Economics Economics Questions
1

Anyone know anything about this fund?

Any recommendations before a toss a little money into it to start exploring various small time investment opportunities?

$43.30 NAV ² 1 Day Change 0.87|2.05% As of 04/08/2011
Investor Risk Profile


The fund’s investment objective is long-term capital appreciation and to protect purchasing power of your capital against inflation. Normally at least 80% of the fund’s assets will be invested in equity securities of domestic and foreign companies engaged in the exploration, mining, or processing of gold and other precious metals and minerals, such as platinum, silver, and diamonds.

Quick Facts

NAV: ²
As of 04/08/2011 $43.30 Expense Ratio: ¹
1.21% Lipper Category: Precious Metal Funds Lipper Category Expense:
As of 03/31/2011 1.45% Newspaper Listing: PrecMM Morningstar Fund Category: Precious Metals Overall Morningstar Rating™:
As of 03/31/2011

Pre-Tax Returns

Month-End Average Annual Total Returns as of 03/31/2011

YTD 1 Year 3 Year 5 Year 10 Year Since Inception
(08/15/1984) Expense Ratio³ Precious Metals and Minerals Fund -4.57% 34.88% 14.66% 19.40% 30.93% 8.28% 1.21% Lipper Precious Metal Funds Index -1.91% 41.13% 13.26% 16.14% 26.23% Philadelphia Gold & Silver Index -4.08% 32.53% 8.01% 9.93% 17.74% Quarter-End Average Annual Total Returns as of 03/31/2011

YTD 1 Year 3 Year 5 Year 10 Year Since Inception
(08/15/1984) Expense Ratio³ Precious Metals and Minerals Fund -4.57% 34.88% 14.66% 19.40% 30.93% 8.28% 1.21% Lipper Precious Metal Funds Index -1.91% 41.13% 13.26% 16.14% 26.23% Philadelphia Gold & Silver Index -4.08% 32.53% 8.01% 9.93% 17.74%

Top Ten Holdings as of 02/28/2011

% of Net Assets NEWCREST MINING 6.64% KINROSS GOLD CORP 6.55% BARRICK GOLD CORP 6.08% GOLDCORP INC 5.85% NEWMONT MINING CORP HLDG CO 5.04% ELDORADO GOLD CORP 4.83% IMPALA PLATINUM HOLDINGS LTD 4.17% YAMANA GOLD INC 3.86% ANGLOGOLD ASHANTI LTD - SPON ADR 3.72% AGNICO-EAGLE MINES 3.67% The top holdings illustrate examples of the securities in which the Fund may invest, and may not be representative of the Fund’s current or future investments. For equity funds, the top ten holdings do not include money market investments. Portfolio Attributes as of 02/28/2011

Net Assets: $2,240.60M Beta vs S&P 500: 0.96 Standard Deviation: 46.18% Portfolio Turnover¹: 15.00% Avg. Weighted Market Cap: $14,736.52M # of Holdings: 51

2

Random thoughts:

  1. Right now gold and silver mines in general are a great idea.

  2. Don’t know particulars about the management running that fund [or any fund, for that matter].

3

Do you have other investments? If you don’t, it’s probably not a good idea to put everything in the mining sector. I don’t know anything about the company USAA; for all I know, they could be piggy backing on the precious metals “movement”, just to get clients.

I am a client of Peter Schiff’s Euro Pacific Capital, and he currently has an international mutual fund (EPIVX), which is part of my portolio. The Fund is diversified into multiple sectors, not just mining. Also, I think Schiff has a better understanding of inflation and economics than most brokers / investment companies. I have been trying to get my parents to move part of their investments into the Fund.

Links to EuroPac International Value Fund: 1, 2

*I am not a licensed broker, and my advice may not be suitable for you.

4

Mining already busted in Canada some time around 2005 IIRC.

5

I’ve seen (much) worse. All companies in the portfolio are more than reputable but there are a few issues with them. For example Newcrest’s largest customers are in Japan: how did the recent earthquake affect them? Impala Platinum will surely be affected by Mugabe’s latest idiotic idea (local ownership of mining companies: Implat is South African with headquarters in Johannesburg). These are just details, but give you an idea of how you should investigate what you are being offered.

You should also ask what are the sales conditions should you need the money or just want to get rid of your fund “shares” for whatever reason. At the moment there are no serious risks of seeing a contration in demand as India and China have a seemingly insatiable hunger for gold, silver, copper, platinum etc and Western investors are becoming seriously concerned about inflation. But things change.