Brian commenced his gold mining company investment in mid-2013 after the sharp fall in the first half of the year, sparked by co-ordinated sell-off of gold by bullion banks. Many gold mining companies began a nightmarish decline that would touch the bottom in late 2014.
During this time, he had to learn the ropes of selecting good quality mining companies, while managing losses as it mounted.
As the results show, despite the deep losses experienced in the first two years of as much as 70% of initial investment, Brian's portfolio is outperforming both the ASX Gold Mining Index and the renowned VanEck's Junior Gold Miners Index (GDXJ) over this period.
Brian's portfolio rode the turnaround of the gold mining companies' fortunes through a concentration towards mid-tier producing companies that were generating modest positive operating cash flows even through the hardest times in late 2014. These companies began to rise strongly in early 2015, notably Northern Star and St Barbara. As the gold price in US dollars bottomed in late 2015, the gold mining companies were gearing up for the next leg of the rally. The market jitters of early 2016 brought oil to below US$30 and this provided strong tailwinds on gold mining companies. The gold equities market along with gold stagnated from late 2016 to mid-2019, which was a testing period. During this time, Brian spent time studying the drivers of value in the gold stocks and reallocated his portfolio accordingly. By the time the gold price rallied, he was able to take advantage of this. The graph showed that since mid-2019, his portfolio took off sharply and left the other two indices far behind.
Since 2017, Brian has developed a more systematic approach to valuing and selecting gold mining companies to include into his portfolio. Given the increase in the price of gold in mid-2019, Brian's portfolio began to outperform against the ASX Gold Mining Index. The selloff in early 2020 as a result of the market panicking over the outbreak of the Wuhan virus did hit Brian's portfolio harder than it did the ASX Gold Mining Index. The subsequent recovery saw his portfolio again take off more strongly. At present, Brian's investment track record clearly confirms he can deliver outperforming returns against the ASX Gold Mining Index and the GDXJ. He has tried and tested his method through the gold price cycle, proving its success against formidable competition.
You can see how Brian's investment performance relative to the peer gold indices shows his capabilities. He has clearly confirmed that his returns are not merely a stroke of luck, but through his ability to identify winners and make timely decisions in his trades. He does not trade in and out of his positions frequently. His ability to deliver strong returns comes instead in finding undervalued companies and hold a core position until it re-rates. He will make tactical trades in these positions during different stages of the gold price cycle.
Geometric return considers the compound return of $1 invested over the entire period, rather than the daily fluctuations.
Standard deviation of returns is calculated using daily returns, annualised by assuming 252 trading days p.a. The standard deviation of returns reflects how much the observed returns varied from the mean return over the period. Another term used commonly is the volatility.
Beta is calculated as the portfolio's returns regressed against the daily returns of the ASX Gold Miners Index (XGD). The beta reflects the sensitivity of the portfolio's returns to the XGD's returns.
Adjusted R-squared is the percentage of the portfolio's returns that is explained by the variation of the returns of XGD, or measures the approximate correlation of the portfolio with the benchmark index.
Alpha is the level of outperformance of the portfolio against the XGD, expressed in annualised terms.
Tracking error is the standard deviation of the daily excess returns of the portfolio against the XGD, expressed in annualised terms.
Information ratio is the ratio of the annualised alpha over the tracking error. The ratio measures the standardised excess outperformance of the portfolio against the index, adjusted for the tracking error.
The performance measures provided are unaudited and as such should not be considered to be accurate. Returns are calculated based on daily price movements and it is possible there are data errors. Past performance is not a reliable indicator of future returns. When interpreting these results, discretion is advised. You are advised to seek professional financial advice when making your own investment decisions based on the contents in this website as it does not guarantee your performance will resemble those shown here.
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