GOLD FUNDS:

‘THE GOOD, THE BAD AND

THE UGLY’
DECEMBER 2023

"You See In This World There's Two Kinds Of People, My Friend - Those With Loaded Guns, And Those
Who Dig. You Dig."
Blondie, “The Good, the Bad and the Ugly”

The Funds ................................................................................................................................... 1

The ‘Good’ .................................................................................................................................. 2
The ‘Bad’..................................................................................................................................... 4
The ‘Ugly’ .................................................................................................................................... 6
CrossBorder Kintore XAU/FX AMC ............................................................................................ 6

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 THE FUNDS
Since live inception in February 2015 to end of December 2023, we can compare the relative
performance of the biggest and most-widely allocated Gold Funds, these include:

1. American Century 2. Van Eck International 3. Fidelity Select

4. Franklin 5. Gabelli 6. First Eagle

Source: Bloomberg

These Gold Funds are composed predominantly of Gold equity assets.

Gold Funds First Eagle American Century Franklin Gabelli Van Eck Int. Fidelity Select
Ticker SGGDX US Equity BGEIX US Equity FKRCX US Equity GLDIX US Equity INIVX US Equity FSAGX US Equity
NAV ($bn) 2.1 0.532 0.858 0.284 0.667 1.3
Physical Gold Allocation 16.330% 0.00% 0.00% 0.00% 0.00% 0.89%
Other Precious Metals Allocation 4.95% 0.00% 0.00% 0.00% 0.00% 0.00%
Gold Equities Allocation 70.72% 99.12% 99.50% 99.60% 98.65% 99.11%
Comm. / Gov. Paper / MMFs / Other 8.00% 0.88% 0.50% 0.40% 1.35% 0.00%
Performance 46.56% 20.18% 6.59% 44.57% 6.92% 19.01%

Source: Bloomberg

Using Spot Gold as the benchmark, we can see that as of the end of 2023, no Gold Fund has
outperformed Spot Gold over the (almost) 9 years back to February 2015. For all the complexity and
portfolio management, these Funds have done no better than a Long Gold strategy.

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 THE ‘GOOD’
One outlier in this selection of Funds is First Eagle. First Eagle has a substantial allocation to Physical
Gold at 16.33%, the only one of the Funds considerred that has direct, undiluted, and pure exposure to
the Gold price. Incidently, this is the best performing of the Funds. Despite Gabelli generating similar
returns, the size advantage that First Eagle has over Gabelli, we consider First Eagle, the ‘GOOD’.

Could the ‘GOOD’ be made ‘GREAT’?

When considering the advantages of a traditional portfolio complemented with an allocation of

CrossBorder Kintore XAU/FX we see that quite often the portfolio return is enhanced and the
downside risk is offset1, resulting in a generally greater return for the risk taken.

Given we have identifed First Eagle as the biggest and the best Gold Fund when compared to other
similarly-comprised Funds, it would be of interest to see how a portfolio of incrementally greater
allocation of CrossBorder Kintore XAU/FX compares to First Eagle alone.

First Eagle vs First Eagle Portfolio with CrossBorder Kintore XAU/FX // Source: Bloomberg

We can see from the above graph that a 10%, 20%, 30%, and 40% allocation of CrossBorder Kintore
XAU/FX in a portfolio with First Eagle consistently enhances performance. It is interesting to note
that at no point does an added allocation of CrossBorder Kintore XAU/FX lessen the performance that
would otherwise have been earnt without its inclusion.

1
See ‘CrossBorder Kintore Portfolio Enhancement for Equities, FI and Gold’

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 Below is a table outlining the statistical implications of the portfolio composition at varying allocations
of CrossBorder Kintore XAU/FX. The story at 10% is the same as the story at 30%. To summarise:

1. Greater Total Return

2. Lower Standard Deviation
3. Reduced Expected Crisis Risk Losses

CROSSBORDER CROSSBORDER CROSSBORDER

CROSSBORDER CROSSBORDER CROSSBORDER
KINTORE GROSS 10% KINTORE GROSS 20% KINTORE GROSS 30%
Statistics First Eagle Gold Fund KINTORE KINTORE KINTORE
First Eagle Gold Fund First Eagle Gold Fund First Eagle Gold Fund
ENHANCEMENT ENHANCEMENT ENHANCEMENT
90% 80% 70%
TOTAL RETURN 46.56% 61.73% 15.17% 69.11% 22.55% 75.45% 28.89%
ANNUAL RETURN 6.02% 6.03% 0.01% 6.03% 0.02% 6.04% 0.02%
ANNUAL STD. DEV 27.26% 24.92% 2.34% 22.75% 4.51% 20.79% 6.47%
GAIN DEVIATION 6.52% 6.08% 0.44% 5.70% 0.82% 5.36% 1.16%
LOSS DEVIATION 3.70% 2.43% 1.28% 3.70% 0.00% 3.23% 0.48%
LARGEST DRAWDOWN -42.16% -34.41% 7.74% -30.00% 12.15% -25.40% 16.76%
RETURN/RISK RATIO 0.39 0.61 0.22 0.41 0.02 0.48 0.09
SHARPE RATIO 0.929 1.97 1.04 1.50 0.57 1.94 1.01

First Eagle Portfolio with CrossBorder Kintore XAU/FX vs CrossBorder Kintore XAU/FX // Source: Bloomberg

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 THE ‘BAD’
The worst of the Fund considered is Franklin, with Van Eck International a close second-worst. With
both sub-$1bn AUMs, Gold equity-heavy allocations and abysmal performance since February 2015,
there is little do differentiate the two. We will consider Franklin as ‘BAD’ given it is the larger of the
two.

As before, we are considering how a portfolio consisting of Gold Funds may be enhanced by an
allocation of CrossBorder Kintore XAU/FX.

We sought to make the ‘GOOD’, ‘GREAT’.

Could we make the ‘BAD’, ‘GOOD’.

Could it even be ‘GREAT’?

Franklin Gold Fund Potfolio with CrossBorder Kintore XAU/FX // Source: Bloomberg

Again, we can see from the above graph that a 10%, 20%, 30%, and 40% allocation of CrossBorder
Kintore XAU/FX in a portfolio Franklin consistently enhances performance.
CROSSBORDER CROSSBORDER CROSSBORDER
CROSSBORDER CROSSBORDER CROSSBORDER
KINTORE GROSS 10% KINTORE GROSS 20% KINTORE GROSS 30%
Statistics Franklin Gold Fund KINTORE KINTORE KINTORE
Franklin Gold Fund Franklin Gold Fund Franklin Gold Fund
ENHANCEMENT ENHANCEMENT ENHANCEMENT
90% 80% 70%
TOTAL RETURN 6.59% 19.91% 13.32% 31.36% 24.77% 42.32% 35.73%
ANNUAL RETURN 4.77% 4.90% 0.13% 5.03% 0.27% 5.17% 0.40%
ANNUAL STD. DEV 34.83% 31.73% 3.10% 28.76% 6.07% 25.97% 8.86%
GAIN DEVIATION 8.38% 7.68% 0.70% 7.02% 1.36% 6.36% 2.02%
LOSS DEVIATION 4.73% 2.43% 2.30% 4.73% 0.00% 4.21% 0.52%
LARGEST DRAWDOWN -56.19% -47.54% 8.64% -43.44% 12.75% -39.19% 17.00%
RETURN/RISK RATIO 0.24 0.49 0.25 0.26 0.02 0.30 0.06
SHARPE RATIO 0.038 0.53 0.49 0.47 0.44 0.75 0.72

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 Considering the statistics relating to a portfolio complemented with incrementally greater allocations
of CrossBorder Kintore XAU/FX, it is clear to see the enhancement benefits.

Just a 10% allocation generates a return over 3x that which a concentrated portfolio of Franklin has
earned. With a 30% allocation, the portfolio is contending with the better of the Gold Funds we have
considered, and there is more room beyond this. Greater allocations of CrossBorder Kintore XAU/FX
are shown to:

1. Lessen the standard deviation,

2. Enhance the returns, and
3. Lessen the expected drawdown

of the largest and most well-known Gold Funds.

Franklin Portfolio with CrossBorder Kintore XAU/FX vs CrossBorder Kintore XAU/FX // Source: Bloomberg

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 THE ‘UGLY’
To summarise, in our brief analysis of performance of Gold Funds contrasted against portfolios
comprised of Gold Funds and CrossBorder Kintore XAU/FX, we have established:

1. Over the past 8/9 years, the largest and most well-known Gold Funds have generated a return
no better than a Long Gold Strategy, and in many cases severely underperformed this
unimpressive benchmark.

2. A portfolio complemented with an allocation of CrossBorder Kintore XAU/FX may generate:

a. Superior returns
b. Lower Standard Deviations
c. Greater Sharpe Ratio
d. Lower Expected Drawdown

than without an allocation.

The ‘UGLY’ truth about large Gold Funds. They are not the only option for Gold-linked returns, and
neither are they the best nor most hard-working for your portfolio.

CROSSBORDER KINTORE XAU/FX AMC

There is a compelling case for a better diversified Gold portfolio achieved with the addition of an
CrossBorder Kintore XAU/FX allocation.

To diversify your portfolio with exposure to the CrossBorder Kintore XAU/FX strategy you may
appreciate to learn that such exposure is available via subscription to our AMC.

Our Actively Managed Certificate (AMC) is issued by UniCredit Bank GmbH as a private placement and
is solely intended for sophisticated, professional, or institutional investors. As you will know, an AMC
is a security and not a fund. Investment is direct with UniCredit Bank via a Swiss or UK custodian bank.

Please note that the security codes of the CrossBorder Kintore AMC are as follows:

ISIN: DE000HV3MMQ5

WKN: HV3MMQ

VALOR: 125816113.

If you have any questions relating to order placement, please contact

Kai Heinecke

+49 89 378 14079

kai.heinecke@unicredit.de

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