List of Gold Miners That Hedge Funds Love

Several prominent investors expressed their concerns about the U.S. dollar at the Ira Sohn Conference. We interviewed Marc Faber (read entire interview here). Here is part of what he said:

I think that in today’s presentations many observers have expressed a view that it’s very difficult to cut entitlements. In other words, social security, Medicare, and Medicaid because nobody wants to do that. Nobody wants to accept that because everybody lives from that, so essentially the fiscal deficit will stay very large, and it will mean that over time the US dollar will lose its purchasing power, more money will have to be printed, more quantity of easy measures will have to take place, and so forth. And eventually, the children, your children will be affected by all this.

Faber has a reputation for being too pessimistic but we think this time he is very close to reality. Several prominent hedge fund managers like Jim Rogers, Julian Robertson, and Ray Dalio agree with him about the US dollar. As a result, investors and hedge funds are flocking into gold, oil, metals and other hard assets that can retain their value in an inflationary environment. The demand from high growing emerging market countries also put a floor under these commodities.

Hedge funds follow various strategies to benefit from increase in gold prices. Hedge fund managers such as David Einhorn bought physical gold. John Paulson, Dan Loeb and Eric Mindich prefer Gold ETF (GLD). John Griffin, James Dinan like Gold Miners ETF (GDX). Other hedge fund managers invested directly in gold mining stocks.

Here are the top gold producers that hedge funds have and prominent investors invested in at the end of March:

Company	Ticker	Holdings	No. of Funds
AngloGold Ashanti Ltd	AU	2,366,391	14
Barrick Gold Corp	ABX	1,363,465	37
Gold Fields Ltd	GFI	1,233,647	14
Newmont Mining Corp	NEM	988,593	29
Goldcorp Inc	GG	701,160	19
Kinross Gold Corp	KGC	596,222	23
Allied Nevada Gold Corp	ANV	444,486	12
Agnico-Eagle Mines Ltd	AEM	443,206	17
PAN American Silver Corp	PAAS	415,919	15
Silver Wheaton Corp	SLW	375,808	16
IAMGOLD Corp	IAG	371,106	15
Silver Standard Resources Inc	SSRI	358,338	7
Harmony Gold Mining Co Ltd	HMY	343,779	7
Seabridge Gold Inc	SA	234,206	7
Randgold Resources Ltd	GOLD	233,457	11
New Gold Inc	NGD	189,773	11
Yamana Gold Inc	AUY	184,057	15
Gammon Gold Inc	GRS	170,597	11
Eldorado Gold Corp	EGO	138,274	13
Royal Gold Inc	RGLD	102,166	7
Great Basin Gold Ltd	GBG	101,167	8
Hecla Mining Co	HL	91,471	15
Minefinders Corp	MFN	71,617	8
Aurizon Mines Ltd	AZK	59,353	9
Northgate Minerals Corp	NXG	59,263	8
Cia de Minas Buenaventura SA	BVN	56,736	11
Nevsun Resources Ltd	NSU	32,585	6
Golden Star Resources Ltd	GSS	30,229	11
Gold Resource Corp	GORO	4,224	5
Tanzanian Royalty Exploration Corp	TRE	306	2

Paulson is the most bullish hedge fund manager about gold since 2009. One of his largest investments in gold is AngloGold Ashanti. He has $2 Billion invested in AU. Barrick Gold ranks second with a total of $1.4 Billion in hedge fund positions. ABX is the most popular gold miner in terms of number of hedge funds invested in. There were 37 hedge fund managers in ABX at the end of March. Paul Touradji and Eric Sprott are among these fund managers.

Gold Fields is the third miner with a $1+ Billion cumulative hedge fund ownership. Hedge funds own around 10% of the company. Paulson Eric Mindich have large positions in GFI. Newmont Mining is the second popular gold miner in terms of the number of hedge funds invested in. There were 29 hedge funds with NEM holdings. Steve Cohen and Jim Simons preferred NEM.

We believe gold miners provide a leveraged exposure to gold. These stocks should perform better than gold bullion if prices keep rising. On the other hand they perform worse than gold bullion in bear markets.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: I am long physical gold.