Top Gold Miners That Hedge Funds Love

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 |  Includes: ABX, AEM, ANV, AU, AUQ, AUY, EGO, FCX, GDX, GG, GLD, HL, IAG, KGC, NEM, NGD, RGLD, SLW
by: Insider Monkey

Several hedge funds are getting a little bearish about gold, but we are still bullish and believe that investors should consider hedging inflation risks by gaining some exposure to gold. Hedge funds follow various strategies to benefit from increase in gold prices. Hedge fund managers generally prefer Gold ETF (NYSEARCA:GLD) or Gold Miners ETF (NYSEARCA:GDX) to benefit from the increases in gold prices. However, some hedge fund managers, such as John Paulson, also invest directly in gold mining stocks (see John Paulson's top stock picks). Paulson has both GLD and miners. He has $3.2 billion in GLD alone.

Insider Monkey summarized hedge fund holdings in top gold miners. We follow 350+ hedge funds. Here are the top gold producers that hedge funds have in their portfolios at the end of Q3 2011:

Company

Ticker

Total Exposure

No. of Funds

Newmont Mining Corp

NEM

1,479,294

47

Freeport-McMoRan

FCX

1,256,819

42

Barrick Gold Corporation

ABX

1,576,307

39

Goldcorp Incorporated

GG

668,710

26

Agnico-Eagle Mines Ltd

AEM

548,563

21

Kinross Gold Corporation

KGC

387,534

21

Hecla Mining Company

HL

89,861

20

Allied Nevada Gold Corp

ANV

564,741

20

Royal Gold, Inc.

RGLD

180,660

19

Iamgold Corporation

IAG

349,650

18

Yamana Gold, Inc.

AUY

250,104

18

NEW GOLD INC.

NGD

153,421

18

AuRico Gold Inc.

AUQ

119,496

18

Silver Wheaton Corp

SLW

233,477

17

Eldorado Gold Corp

EGO

144,181

16

Click to enlarge

John Paulson has been the most bullish hedge fund manager about gold since 2009. His largest investment in Gold is the Gold ETF GLD. He had more than $3.2 billion in GLD as of the end of September. Meanwhile, he has more than $1.5 billion invested in AngloGold Ashanti (NYSE:AU). Jim Simons, Ken Griffin, and Steven Cohen also had small positions – a few million dollars - last quarter in AU (see billionaire Jim Simons’ top stock picks).

More hedge funds owned Newmont Mining than any other gold miner at the end of September. Jean-Marie Eveillard’s First Eagle Investment Management had the largest chunk in Newmont Mining among the hedge funds we track, with more than 60 million shares or nearly $380 million. Jim Simons and Martin Whitman lay at the top of the list of hedge fund managers with positions in Newmont Mining. Jim Simons boosted his position by 26% and had $166 million as of the end of September.

Freeport-McMoran Copper & Gold (NYSE:FCX) is also a popular gold miner in this list. Ken Fisher’s Fisher Asset Management invested $221 million in the stock in the third quarter. This is after the firm slightly decreased its position by 5%. During the third quarter, Cliff Asness boosted his FCX position by 362% and had $63 million in the stock (see billionaire Cliff Asness’s top stock picks). Meanwhile, several hedge fund managers initiated new positions in FCX, including Ralph V. Whitworth, Jim Simons and Glenn Russell Dubin.

Barrick Gold Corp (NYSE:ABX) is another miner that heads the group in popularity. David Einhorn’s Greenlight Capital initiated a $63 Million ABX position last quarter.

We believe gold miners provide a leveraged exposure to gold. These stocks should perform better than gold bullion if prices rebound. On the other hand, they perform much 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.