| SINGAPORE, June 7
SINGAPORE, June 7 Sydney-based Taurus Funds
Management Pty Ltd has shut its precious metals mutual fund as
Australian and U.S. investors fled after prices of gold began to
decline in the beginning of the year, director Gordon Galt told
The fund, which at one point held about $250 million in
assets under management (AUM), was closed last month after large
redemptions reduced the size of the fund. Its AUM was at $120
million as of December, according to Galt.
"We had a number of large investors who decided they no
longer wanted to carry the exposure to precious metals," said
Galt. "So once the fund got below a certain size, it was not
worth continuing to run it."
Gold fell to a two-year low of $1,321.35 in mid-April, its
worst two-day drop in 30 years, on fears European countries
would liquidate gold reserves.
The metal is down 16 percent this year, after 12 annual
gains, as investors switched to higher-yielding stocks. Growing
evidence of a recovery in the global economy has hurt bullion's
SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, has seen an unprecedented decline in
holdings, which are at a four-year low.
"The investors were changing their mandates and allocations
in the first quarter of the year. It was not precipitated by the
(April) fall," Galt said.
Galt declined to reveal who the investors were but said they
were Australian and U.S. investors. Five employees who were
managing the fund have departed the firm, he said.
The Taurus Enhanced Gold and Precious Metals fund has lost
about 10 percent of its value this year and nearly 20 percent
since its inception in 2011, Thomson Reuters Lipper data showed.
Galt said his firm continued to invest in gold through its
private equity funds.
"Our private equity funds still have precious metals
exposure in their portfolios. We are not doing anything with
those," Galt said.
(Editing by Muralikumar Anantharaman)