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Morningstar, Inc., a mutual fund rating service,
defines gold
funds – those
having a precious metals objective
set out in the offering prospectus – as
those “Funds
that pursue capital appreciation by investing primarily in
equity
securities of companies engaged in the mining, distribution,
or processing
of precious metals.” Likewise, Morningstar
assigns gold
funds to its
“Specialty--Precious Metals Category” if
its portfolio focuses on “mining
stocks, though some
do own small amounts of gold buillion.
Most portfolios concentrate on gold-mining
stocks, but some have significant
exposure to silver, platinum,
and base metal mining stocks as well. Precious
metals companies
are typically based in North America, Australia, or South
Africa.” Midas Fund, included in Morningstar’s group of gold
funds,
pursues gold
investing by having at least 65% of its total assets in
(i) securities of companies primarily
involved, directly or indirectly, in
the business of mining,
processing, fabricating, distributing or otherwise
dealing
in gold, silver, platinum or other natural resources
(“Natural
Resources Companies”) and
(ii) gold, silver and platinum bullion.
Up to 35% of the Fund’s assets may
be invested in securities of companies that
derive a portion
of their gross revenues, directly or indirectly, from the business
of mining, processing, fabricating, distributing or otherwise
dealing in gold, silver,
platinum or other natural resources,
in securities of selected growth companies
and fixed income
securities of any issuers, including U.S. government securities.
Like many gold
funds, Midas Fund may invest in domestic or foreign
companies
that have small, medium or large capitalizations
and concentrates its investments
by investing at least 25%
of its total assets in Natural Resources Companies.
Because gold
funds typically concentrate investments in smaller
companies and
foreign securities, with mining and exploration
risks of precious metals, gold
funds
are riskier and more speculative than general,
diversified funds. Unlike some other
gold
funds, in seeking to enhance returns, Midas Fund
may use futures, options
and short sales, and may use leverage.
To learn more about gold
investing and Midas Fund, we invite you to explore
our web site or call 1-800-400-MIDAS (6432) to speak to
a shareholder services representative. Thank you for investing with
Midas!
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Prospectus
