Midas MarketScope

October 02, 2024

The Federal Open Market Committee (FOMC) on September 18, 2024 cut the federal funds rate from a target range of 5.25%-5.50% to 4.75%-5.00%. The FOMC noted that there has been progress on lowering inflation and it will continue to take into account labor market conditions, inflation pressures, and other economic information on future policy actions. The U.S. Federal Reserve isn’t the only central bank undergoing an easing of monetary policy. China’s central bank also recently lowered the reserve requirement ratio for Chinese banks by 50 basis points and cut the rate on its one-year medium-term lending facility to 2% from 2.3%. At the same time, the price of gold, which increased about 27% since the start of the year to the week ending 9/20/2024, has thus far reacted positively to the policy change. When interest rates fall, the carrying and opportunity cost of holding gold decreases. Over the week ending 9/20/2024, the world’s largest gold-back ETF, SPDR Gold Shares, increased its holdings by 12 tonnes. Increased geopolitical uncertainty may have also positively impacted the price of gold after, among other things, the recent escalation between Israel and Hezbollah.


At Midas we believe quality investments can sustain an investor’s focus on long term results. That’s why

Midas Fund seeks to invest in precious metals and securities of natural resource and other companies

that offer financial strength, expanding production, increasing cash flow, or other special features.

Likewise, Midas Magic seeks to invest in potentially some of the world’s strongest companies with global

operations in finance, technology, and other industries.

Thomas Winmill
Portfolio Manager

Midas Fund (ticker: MIDSX)

The Fund’s holding of Endeavour Mining plc., an African-focused gold miner, performed well in the past month. Shares of Red 5 Ltd., an Australian gold mining company, underperformed in the past month.

The Fund seeks primarily capital appreciation and protection against inflation and, secondarily, current income. Under normal circumstances, in pursuit of its investment objectives, the Fund’s investment strategy is to invest principally in (i) securities (e.g., common and preferred stocks, bonds, convertible securities, etc.) of companies primarily involved, directly or indirectly, in the business of mining, processing, fabricating, distributing or otherwise dealing in gold, silver, platinum, other precious metals, or other natural resources (“Natural Resources Companies”); and (ii) gold, silver, and platinum bullion and coins; provided, however, that the Fund may invest in any type of equity security (e.g., common and preferred stocks) and in companies of any size, industry or sector, including both domestic and foreign companies, that the Fund’s investment manager believes may achieve the Fund’s investment objectives. Up to 35% of the Fund’s total assets may be invested in fixed income securities of any issuer, including U.S. government securities, of any credit quality or maturity, although the Fund has no current intention of investing more than 5% of its total assets in fixed income securities rated less than investment grade (also known as “junk bonds”). The Fund concentrates its investments by investing at least 25% of its total assets in Natural Resource Companies.

Midas Magic (ticker: MISEX)

The Fund’s position in Williams-Sonoma, Inc., an American retailer of kitchenware and home furnishings, performed well in the past month. The Fund’s holding of Lam Research Corporation, an American supplier of wafer-fabrication equipment to the semiconductor industry, hindered the Fund’s performance in the past month. Each of Mastercard Inc. Class A and Alphabet Inc. Class A currently comprise more than 20% of the Fund’s net assets.


The Fund seeks capital appreciation. Under normal circumstances, in pursuit of its investment objective, the Fund may invest in any security type (e.g., common and preferred stocks, bonds, convertible securities, etc.) and in companies of any size, industry, sector, including both domestic and foreign companies. Relative to the S&P 500, the Fund’s portfolio currently is more weighted in economically sensitive sectors, such as communications, and cyclical sectors, financial services, and is underweight in defensive industries, such as utilities. 

How to Invest in Gold?

Three alternatives investors often consider when seeking the advantages of gold are gold bullion, stocks of gold mining companies, and funds that invest in gold and gold-related securities, such as Midas Fund. Using a disciplined approach, Midas Fund seeks to emphasize gold and other natural resource companies offering financial strength, expanding production profiles, strong free cash flow, and promising exploration potential. The Fund’s portfolio is focused on what we believe to be some of the best companies in the sector and so we view Midas Fund as currently well positioned to seek capital appreciation and protection against inflation.

CAUTIONARY NOTES

This release may contain certain “forward looking statements” as defined under the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” “may,” “should,” “plan,” or the negative of such terms, and similar expressions identify forward looking statements, which generally are not historical in nature. Forward looking statements are subject to certain risks and uncertainties that could cause actual results to materially differ from a Fund’s historical experience and its current expectations or projections indicated in any forward looking statements. These risks include, but are not limited to, equity securities risk, corporate bonds risk, credit risk, interest rate risk, leverage and borrowing risk, additional risks of certain securities in which a Fund invests, management risk, risks related to the negative impacts from the continued spread of COVID-19 on the economy and broader financial markets, and other risks discussed in each Fund’s filings with the Securities and Exchange Commission. You should not place undue reliance on forward looking statements, which speak only as of the date they are made. Each Fund undertakes no obligation to update or revise any forward looking statements made herein. There is no assurance that each Fund’s investment objectives will be attained.

Certain information contained herein has been obtained from third parties. While the Funds believe such sources are reliable, the Funds cannot guarantee the accuracy of any such information and does not represent that such information is accurate or complete.