The MFM Junior Gold fund is changing its name to better reflect a change in its authorised corporate director (ACD) and its increasing allocation to silver mining companies.
The fund has transferred its ACD from Marlborough to Investment Fund Services Limited (IFSL) and over the past 18 months has seen the portfolio weighting to silver miners increase to 40%. As a result, it will change its name to the IFSL SIM Junior Gold and Silver Miners fund from 26 November.
It said in a statement the increase silver weighting was driven by growing industrial demand for the metal, underpinned by the global shift towards renewable energy, electrification of transportation and other technological developments that favour silver’s superior electric conductivity.
Sector Investment Managers (SIM) is the fund’s adviser and investment manager. SIM chief executive Angelos Damaskos said the current macro-economic situation, with rising inflation and historically low interest rates, is likely to result in an investor move to safe-haven assets such as gold and silver bullion.
“This will strengthen the appeal of all aspects of the gold and silver mining-to-market process,” he added. “We invest in smaller, earlier stage operations, where we see most potential for growth, and these tend to perform better in a rising precious metals price environment, which boosts profitability.”
SIM said gold and silver mining companies were undervalued compared to the commodity they produce and the strong cash flows generated by operating mines.
It added this comes despite some cost inflation in operations as equipment, energy and other key prices rise because profit margins offered by historically high bullion prices remain healthy. Significant capital has also been raised by exploration and development companies to progress earlier projects, yet valuations remain cheap.