As at 27/2/04 the Fund remained invested in a diversified portfolio of major, medium-sized and junior gold and mining company shares active in North America, Australasia, Africa, Russia and other countries, as well as a large physical position in the metals themselves (18% silver + 8% gold + 3% palladium = 29% of the Fund).

In February (and into early March) we made Placer a big position, thereby adding to the copper exposure, as well as Agnico Eagle, Harmony, Meridian, and a number of smaller names. We participated in a special warrants private placement in Frontera Copper. We remind investors that our first unlisted (pre IPO) stock, African Minerals, is due to list in the first quarter 2004 in North America. The Fund's directors continue to value it at book, USD 8.

Speculative Comex net long positions have nearly halved to 7mn oz in recent weeks. Global hedge books have fallen by 3.4mn oz to 73.1mn oz. Barrick and AngloGold both plan to reduce hedge books this year. Demand from India - the world's biggest consumer - rose nearly 4% in 2003, despite a c20% price increase, easing fears that higher prices would choke off demand. We are confident in the investment case for gold and, in particular, the physical precious metals sector, where we have - unusually for a fund - the flexibility to have a large weighting.

Asset Allocation (as at 27/2/04)	Top 10 Holdings (52% of fund)
Gold and resource shares: 66%	1. Silver Bullion 18%
	2. Gold Bullion 8%
Silver, gold, palladium: 29%	3. Harmony Gold 4%
	4. Goldfields 4%
Cash 5%	5. Palladium Bullion 3%
	6. Agnico Eagle 3%
	7. African Minerals 4% (pre IPO subsc)
	8. Meridian Gold 3%
	9. Resolute Mining 3%
	10. Ivanhoe 2%
Asset Allocation (per month)