Best-Performing Gold Funds Surge Up to 66%

BOSTON (TheStreet) --- Gold funds surged an average of 38% this year,
about 2 times the pace of the benchmark *S&P 500 Index*, as the
precious metal reached a record.

Gold is a popular investment in times of economic and political
uncertainty. Since many countries in the developed world are running
huge deficits and printing money, and there is a long-running war in
the Middle East and the threat of one in Korea, gold has extended a
rally that bodes well for the sector in 2011, analysts say.

Investing in mutual funds that buy gold-company stocks is a way to
reduce risk in the highly volatile sector. Problem is, only a handful
of funds produce relatively consistent returns. Also, the price of
gold itself is up 19% this year, half that of the average
precious-metals fund, which mostly hold gold-related stocks instead of
the commodity itself.

Gold traded around $1,383 an ounce this week after hitting a record
$1,432.50 on Dec. 7. In July 1997, gold sold for $319 an ounce, its
lowest price since December 1985.

Morningstar analysts are using a long-term gold-price assumption of
$1,366 per ounce in their gold-stock analysis models, which
corresponds to Comex gold futures contracts, a widely accepted
barometer of gold prices.

Four funds with excellent long-term records and their holdings follow,
as well as a new mutual fund that's the top performer this year.