JUNIOR MINING

Junior mining fund will focus on gold. Launches Sept 7

The UK's Hargreaves Lansdown is launching a junior mining fund, with a main focus on junior gold mining stocks, with smaller allocations in silver, PGM, base metals and uranium juniors.

RENO, NV -

Bristol, UK-based financial services company Hargreaves Lansdown will launch The Junior Mining Fund Monday, which will be managed by commodities specialist Angelos Damaskos.

The fund's main focus is on gold mining with 70% of the portfolio allocated to the sector at launch, although this can change over time.

"While commodities in general have performed well this year, gold shares have lagged the sector," Hargreaves Lansdown noted. "Research shows that gold mining shares are the most undervalued they have been relative to the gold price since 1984."

The fund may also invest roughly 10% in other precious metals including silver, platinum and palladium and 10% in base metals shares such as copper and iron ore. Another 10% will be allocated to equities in uranium mining companies, which the firm feels "could benefit from growing demand due to an increasing need to provide environmentally friendly ways of generating power."

"These allocations are subject to change over time depending on market conditions and where the manager identifies companies with the best growth prospects."

The fund will have exposure to Australia, Africa (predominantly South Africa), Canada, Far East and Latin America. However fund manager Damaskos will avoid "areas like Russia and the Middle East where political risk is high," the company said.

At least half of the fund will be invested in the small and medium-sized companies with a concentrated portfolio of around 40 holdings. "Although the fund also has the ability to hold up to 30% in cash depending on market conditions, it may be extremely volatile over shorter periods," Hargreaves Lansdown advised."A long term horizon of more than 10 years is essential with a fund of this nature as its value will fall as well as rise."

Hargreaves Lansdown mainly operates under the Vantage brand. The trustee of the junior mining fund is HSBC Bank.

For more information, go to the website http://www.h-l.co.uk/funds

F6