John Paulson and George Soros remain fans of gold and shares of gold miners , according to recent filing with the Securities and Exchange Commission.
Paulson’s hedge fund, Paulson & Co., for a third consecutive quarter, did not alter its stake in the SPDR Gold Shares (NYSEArca: GLD), the largest exchange traded fund, backed by physical gold. Paulson & Co. is the largest holder of GLD with 10.23 million shares as of the end of the first quarter, reports Debarati Roy for Bloomberg.
GLD is Paulson’s second-largest equity or ETF position behind Extended Stay America (NYSE: STAY). Gold has strengthened modestly this year amid escalating tensions in Eastern Europe. [Ukraine Crisis Lists Gold ETFs]
“Escalating Russian aggression towards the Ukraine is causing investors to build their holdings of defensive assets, including gold. Indeed, US long bonds, along with gold have been some of the best investments so far in 2014, highlighting investor anxiety about the potential ramifications from Russian conflict. Gold is also gaining traction as a portfolio diversifier as equity markets have displayed their sensitivity to emerging market headwinds,” according to a research note by ETF Securities.
Filing data indicate Paulson & Co. does not own a position in a gold miners ETF. However, the hedge fund has equity stakes in AngloGold Ashanti (NYSE: AU), NovaGold Resources (NYSE: NG), Iamgold (NYSE: IAG), Gold Fields (NYSE: GFI), Agnico Eagle Mines (NYSE: AEM) and Randgold Resources (NYSE: RAND).
Randgold, AngloGold Ashanti, Agnicao Eagle, Gold Fields and Iamgold combine for over 16% of the Market Vectors Gold Miners ETF (NYSEArca: GDX), the largest gold miners ETF.
George Soros’ Soros Fund Management LLC boosted its stake in GDX in the first quarter and added to its position in Barrick Gold (NYSE: ABX) as well, according to Bloomberg. Barrick is GDX’s second-largest holding with an allocation of 13.2%. GDX has outpaced GLD this year by about 150 basis points. [Mining ETFs Top Physical Counterparts]
Other positions in exchange traded products for Soros Fund Management at the end of the first quarter included a new, small position in the VelocityShares Daily Inverse VIX Short-Term ETN (NYSEArca: XIV), put options on the iShares Russell 2000 ETF (NYSEArca: IWM) and the iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX), according to Whale Wisdom.
Soros Fund Management also added to its position in the Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) while eliminating a small stake in the Financial Select Sector SPDR (NYSEArca: XLF). The firm added a position of 225,000 shares in the Energy Select Sector SPDR (NYSEArca: XLE), according to Whale Wisdom. XLE is the top asset-gathering sector ETF in 2014. [Energy Sector Dominates 2014 ETF Inflows]
Market Vectors Gold Miners ETF
Tom Lydon’s clients own shares of GLD and IWM.