Gold Miners Raise Record Cash as Bank of America Names Them the Top Investment Theme of 2025

Valuations Overextended

In case you’ve been living around a rock, AI has dominated both public markets and venture capital flows. According to PitchBook, more than 55% of global venture funding this year has gone to AI, with giants like OpenAI, Anthropic and xAI receiving the lion’s share.

In the public markets, Nvidia, Microsoft and their Mag 7 peers have carried the Nasdaq and S&P 500 to repeated all-time highs, while equal-weight indices lag far behind.

Valuations are stretched. The S&P’s forward price-to-earnings multiple sits near 23 right now, on the higher end of the spectrum.

Billionaire hedge fund manager Leon Cooperman told CNBC this week he thinks we’re at the stage of the bull market that Warren Buffett cautioned about; namely, irrational exuberance appears to be in control, not fundamentals. The so-called Buffett indicator—the ratio of total U.S. market cap to gross national product (GNP)—surged past 200% this week, meaning equities are now valued at more than double the size of the U.S. economy.

None of this guarantees a crash is coming, of course. But as someone who lived through the internet frenzy of the late 90s, I know what can happen when investor capital collects too narrowly in a handful of names. If an AI pullback happens, it could be sharp.

Gold and Silver Still Under-owned

That brings us to gold and silver, which just posted a historic third quarter. Gold surged 17% to $3,840 an ounce, its largest quarterly dollar gain on record, according to the Wall Street Journal. Silver jumped nearly 30% to $46.25, its biggest quarterly percentage gain ever, and just shy of its 1980 peak, when the Hunt brothers notoriously tried to corner the global silver market.

Remarkably, precious metals remain deeply underrepresented in portfolios. In a report dated September 25, Bank of America strategists point out that gold makes up a measly 0.4% of private client assets and 2.4% of institutional assets.

When investors wake up to the need to diversify in a high-valuation, low-yield world, the flood of capital into metals and mining could be massive.

Gold Miners Back in Favor

The rally hasn’t been limited to physical bullion. Gold mining stocks, long our of favor, are roaring back.

Bloomberg reports that the group collectively raised $6.7 billion in equity in the third quarter alone, the highest quarterly total on record.

Major offerings from Hong Kong’s Zijin Gold, China’s Shandong Gold and Indonesia’s Merdeka Gold are leading the rally.

I was pleased to see that Bank of America named gold miners its number one investment theme of 2025, ahead of uranium, defense tech and even AI. That’s a huge endorsement in a year when tech and AI have dominated the news.

Gold in a Diversified Portfolio

I would be remiss if I didn’t mention that gold and silver are flashing overbought signals right now, whether viewed through standard deviation or the 14-day relative strength index (RSI). Historically, such moves have preceded pullbacks. I wouldn’t be surprised if a correction occurred before we see further gains.

Even if precious metals roll over, the losses could be smaller and shorter-lived than a potential AI crash. Hypothetical stress tests conducted by the World Gold Council (WGC) found that adding gold to a diversified portfolio reduced declines by 50 to 90 basis points across scenarios ranging from equity crashes to credit squeezes.

The Underinvestment Opportunity

I see a lot of potential opportunity in the underinvestment theme.

We’re living in a time of extraordinary capital concentration. On one end of the spectrum, trillions are pouring into AI platforms and a handful of megacap stocks. On the other, gold and silver, through breaking records, remain afterthoughts in most portfolios.

Which side do you think offers greater margin of safety today?

Older investors in particular should pay attention. Many no doubt remember the dotcom crash. Even Amazon—today, the world’s fifth largest company by market capitalization—plunged more than 90% from peak (December 1999) to trough (October 2001). Over the same period, gold gained about 5%—nothing to write home about, but it certainly helped stem the losses elsewhere.

I’m not suggesting you sell your Mag 7 stocks. Just don’t ignore the tried-and-true assets that have helped empires and households alike preserve their wealth for thousands of years.

Interested in learning about opportunities in precious metal miners? Send us an email with the subject line PRECIOUS METALS to [email protected].

Airlines and Shipping

Strengths

• The top-performing airline stock this week was Airports of Thailand, up 10.5%. According to UBS, Lufthansa outlined new long-term targets at a company meeting. Key initiatives include improving margins through a turnaround program, fleet modernization, IT upgrades, an enhanced loyalty program, and workforce reductions. The company also plans to significantly expand its fleet, maintain a strong balance sheet with ample liquidity, and adopt a dividend policy tied to net income.
• Scorpio Tankers sold three of its 99 vessels for $164 million, reducing pro-forma net debt to $131 million. It also sold half its equity stake in DHT, a VLCC crude tanker owner, for $60 million. The vessel sales included two 2019-built Aframax tankers at $61.2 million each and one 2020-built Suezmax for $42 million, according to Bank of America.
• Citing sources familiar with the matter, a media report notes that Boeing CEO Kelly Ortberg met with Rolls-Royce officials earlier this year to discuss a new engine for an upcoming aircraft, while Boeing has also been designing the flight deck for a new narrowbody model.

Weaknesses

• The worst-performing airline stock this week was Tripadvisor, down 7.4%. A U.S. government shutdown could significantly impact travel and airline operations. United and American may be hit hardest. Boeing’s 737 MAX 7 and 10 certifications would be delayed, FAA oversight of production could pause, and seating approvals for Southwest would be stalled.
• Yangzijiang Shipbuilding terminated four oil tanker contracts worth US$180 million after learning the buyer’s sole shareholder was allegedly involved in a scheme to evade U.S. sanctions. According to J.P. Morgan, this highlights the fragility of YZJ’s orderbook and the sector’s ongoing exposure to geopolitical and compliance risks.
• Some A321XLR customers are reportedly experiencing buyer’s remorse, struggling to realize the aircraft’s promised widebody-like economics. According to Bloomberg, its actual range falls short when fully loaded, and the added fuel tank limits space for high-margin cargo.

Opportunities

• Ticket bookings for the upcoming October Golden Week are strong, according to Morgan Stanley. Airlines reported higher volumes and increased ticket prices compared to the same period last year, partly due to the longer holiday. They also noted that any spring/autumn holidays introduced for students would likely boost demand further.
• Despite declining spot rates, Bank of America expects 3Q container liner earnings to exceed 2Q levels, due to the timing of the rate decline and revenue recognition policies. The CCFI index is tracking up 4% quarter-over-quarter in 3Q, though potential losses are expected in 4Q.
• Boeing’s 12-month order momentum continues to strengthen, supported by recent trade deal announcements, bringing total orders to nearly 1,100 units. This is meaningfully expanding the backlog and supporting higher production rates. UBS projects 622 deliveries in 2025 and 1,001 in 2029. Goldman Sachs estimates 53 deliveries for September, including 40 737 MAX and 7 787 aircraft, with 34 of the MAX deliveries from new production and 6 from inventory.

Threats

• The U.S. government shut down on October 1. TSA and air traffic control (ATC) staff are considered essential employees; however, past shutdowns of extended duration have seen increased absenteeism, according to TD.
• Maersk’s current order book—equivalent to 32.7% of the active fleet—compares to 12% of the fleet being over 20 years old. UBS believes this dynamic may encourage market share gains over rational capacity behavior. Additionally, they note mid-term limitations in two key supply-side levers: vessel scrapping and reduced sailing speeds.
• Goldman is lowering its 3Q25 industry net income forecast by 5%, primarily due to higher fuel costs, as the previous estimate was based on jet fuel prices at their mid-August lows. Overall, the revisions are modest.

Luxury Goods and International Markets

Strengths

• China and the Eurozone reported stronger-than-expected manufacturing data for September. China’s Manufacturing PMI rose to 49.8 from 49.4 previously, while the Eurozone PMI improved to 49.8 from 49.5. Although both readings remain below the 50 threshold, indicating contraction, the upward trend suggests conditions are gradually improving.
• Tesla reported stronger-than-expected third-quarter deliveries, handing over 497,099 vehicles globally versus estimates of 439,612. The upbeat results helped fuel a 31% gain in the company’s shares during September.
• Selavatore Ferragamo, the Italian luxury fashion house, led the S&P Global Luxury Index with a 17.6% gain this week. Shares rose mainly due to strong technical momentum, breaking out of a recent downtrend and triggering a wave of buying as the stock surpassed key resistance levels.

Weaknesses

• Eurozone headline inflation rose to 2.2% year-over-year in September, surpassing the ECB’s 2% target for the first time since April. Core inflation held steady at 2.3%, while unemployment inched up to 6.3% in August from 6.2% in July.
• In the United States, the ISM Services Index for September 2025 fell to 50.0, down from 52.0 in August and below the consensus forecast of 52.0, reaching its lowest point since May 2025. This result signals the services sector has stalled, with business activity slipping into contraction (49.9), new orders growth slowing to 50.4, and employment remaining in contraction territory at 47.2.
• Rivian Automotive was the worst-performing stock in the S&P Global Luxury Index, plunging 12.8% this week. The company lowered its annual delivery guidance to a range of 41,500 to 43,500 vehicles, down from a previous forecast of up to 46,000. This narrower and reduced guidance raised concerns about demand and profitability, leading to a sharp decline in its stock price despite stronger-than-expected third-quarter sales.

Opportunities

• Stocks listed on the DAX Exchange, Germany’s benchmark index in Europe’s largest economy, hit a new record high this week, breaking through a key resistance level and signaling potential for further gains. Technology shares led the advance after South Korean chipmakers Samsung and SK Hynix announced agreements to supply memory chips for OpenAI’s data centers, boosting demand for German tech stocks. Automakers also traded higher, adding momentum to the rally.
• Nike reported revenue slightly ahead of expectations, helping lift other footwear names like Adidas and JD Sports. The company’s top line rose ~1% year-over-year, driven by strength in North America, renewed demand in wholesale channels, and gains in running-category product launches.
• China’s Golden Week holiday has kicked off, marking one of the country’s busiest travel and shopping periods. The surge in domestic tourism and consumer activity presents a strong opportunity for increased discretionary spending, providing potential support for luxury stocks that rely heavily on Chinese demand.

Threats

• The U.S. government shutdown that began on October 1, 2025, is weakening consumer confidence by increasing uncertainty and reducing public trust in the economy. As federal employees face pay delays and some government services are suspended, many consumers are worrying about job stability and holding back on spending, especially if the shutdown lasts for several weeks.
• Luxury sales, which had been expanding at a 7–10% annual pace pre-pandemic, contracted sharply by 44% in the second quarter of 2020 before staging a strong rebound in 2021 and 2022. By late 2023, the sector entered a normalization phase and has remained largely flat over the past six quarters. Bank of America projects third quarter revenue to be roughly unchanged year-over-year, an improvement from the -3% decline in the second quarter, but expects another downturn in the fourth quarter.

• A recent outbreak of stomach flu among passengers on a Royal Caribbean ship departing San Diego highlights a potential risk for the cruise industry. Such incidents raise concerns over onboard health and safety, forcing operators to increase sanitation measures and potentially deterring travelers.

Energy and Natural Resources

Strengths

• The best-performing commodity this week was copper, up 6.51%. Prices are surging toward $10,600 per ton, driven by supply disruptions at key mines such as Grasberg, El Teniente, and Constancia, as well as strong demand from electrification, renewable energy, and AI infrastructure. These trends suggest a potential structural bull phase. Despite supply headwinds, major banks including J.P. Morgan, Goldman Sachs and Bank of America forecast prices exceeding $11,000/t by late 2025 and into 2026, supported by ongoing deficits, low inventories, and significant demand from China.
• Nutrien is benefiting from a macro tailwind supported by potential U.S. government bailout funds for farmers, which could increase fertilizer demand. RBC Capital Markets has also issued a positive sector outlook, citing strong agricultural fundamentals, firm commodity prices, and favorable natural gas and supply conditions. These factors create an optimistic environment for fertilizer companies and support Nutrien’s recent gains.

• BP Plc has made a final investment decision on the $5 billion Tiber-Guadalupe project in the U.S. Gulf of Mexico—a key part of its strategy to increase oil and gas production to over 400,000 barrels per day by decade’s end. The project includes the Tiber platform, which has a capacity of 80,000 barrels per day, and supports BP’s broader shift toward high-margin fossil fuel production amid leadership changes and ongoing asset divestments.

Weaknesses

• The worst-performing commodity this week was oil, down 7.44%. Oil is on track for its steepest weekly decline since June, with Brent futures falling below $65 a barrel—down about 8%—ahead of this weekend’s OPEC+ supply meeting. Traders are bracing for the group to accelerate output hikes, as a looming global surplus and added U.S. pressure weigh on sentiment.
• U.S. oil companies such as Exxon, Chevron, and ConocoPhillips are cutting thousands of jobs this year in response to falling oil prices, rising tariffs, and increased industry consolidation, with over 4,000 layoffs reported through August. Industry executives have criticized government policies that favor lower prices and higher tariffs, warning that these, combined with OPEC+ supply increases, threaten the profitability and innovation of the U.S. shale sector.
• TotalEnergies plans to save $7.5 billion by reducing investments and operating expenses through 2030, amid forecasts of weaker energy prices and supply surpluses. The company will cut annual investments in oil, gas, and renewables by about $1 billion, aiming to maintain shareholder payouts while shifting toward a more diversified energy portfolio.

Opportunities

• The current surge in copper prices is primarily driven by supply disruptions, particularly the collapse of the Grasberg mine in Indonesia, which is unlikely to resume full operations until 2027. However, for a sustained bull market, demand—especially from China—must increase, as supply constraints alone are unlikely to keep prices elevated without stronger consumption.
• Warren Buffett’s Berkshire Hathaway plans to acquire Occidental Petroleum’s petrochemical business for approximately $9.7 billion, marking its largest deal since the acquisition of Alleghany Corp. in 2022. The transaction, expected to close in the fourth quarter, signals Buffett’s renewed appetite for large-scale takeovers after years of scaling back major holdings.
• KKR has expanded its presence in the Middle East by acquiring a minority stake in ADNOC Gas Pipeline Assets, which operates key gas pipelines and export terminals in the UAE. ADNOC will retain control of the network. The deal builds on prior ADNOC pipeline investments and reflects KKR’s broader strategy to strengthen regional partnerships, backed by its substantial infrastructure portfolio and dedicated Middle East investment team.

Threats

• Freeport-McMoRan has agreed to transfer a 12% stake in its Indonesian unit to the government at no cost, as part of an agreement to extend its Grasberg mine operating license beyond 2041. This divestment, which adds to the Indonesian government’s existing majority stake, comes amid production disruptions and ongoing negotiations over mining laws and export restrictions.
• The Trump administration plans to cancel billions of dollars in energy project funding, including a $600 million grant for upgrading California’s electric transmission lines. These cuts are part of a broader effort to save approximately $7.6 billion by terminating support for 223 projects, some of which are already under appeal due to existing funding disputes.
• LNG shipments to Pakistan have declined by about 5% in 2025 compared to peak levels in 2021, as the country moves to reduce reliance on imported gas due to high prices and lower demand. Pakistan aims to increase domestic gas exploration to offset the drop in LNG imports and is considering renegotiating or deferring long-term supply contracts.

Bitcoin and Digital Assets

Strengths

• Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Zcash, rising 149.58%.
• Bitcoin rose to $120,000 for the first time since setting a record high seven weeks ago as speculation increases that the U.S. government shutdown will drive investors to safe-haven assets. Bitcoin’s historical outperformance in the month of October, which has earned the nickname “Uptober,” is adding to the bullish sentiment with the token having gained in nine of the past 10 Octobers.

• Rothschild & Co. Redburn analyst raised the recommendation on Coinbase Global to buy from neutral. The price target is set to $417, which implies a 12% increase from Thursday’s close.

Weaknesses

• Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was DoubleZero, down 19.92%.
• Bitcoin’s attempt to reclaim its record high looks fragile and easily susceptible to a selloff in a stretched stock market. The cryptocurrency climbed above $120,000 for the first time since August, bringing it within 4% of its all-time high of $124,514.
• New York lawmakers propose taxing crypto miners based on their electricity usage. The bill suggest that the crypto miners’ taxes will be funneled to the state’s Energy Affordability programs that cut energy costs for low and moderate income New Yorkers.

Opportunities

• The tokenization of assets is set to rewire financial services, according to Robinhood’s CEO. Tokenization will expand the addressable market from low-single-digit trillions to tens of trillion of dollars. Proponents of tokenization believe it has the potential to widen access to illiquid assets while cutting fees.
• Nomura Holdings plans to expand in Japan’s digital-asset market through a subsidiary, as crypto trading in the country heats up. The subsidiary, Laser Digital Holdings is preparing to apply for a license to offer crypto trading services for institutional clines in Japan.
• Cryptocurrencies are looking forward to a strong October on seasonal trends, IPOs, a wave of fund inflows, Trump family backing and regulatory catalysts. Buzz over “Uptober” where Bitcoin averaged 23% gain in October in the past decade is building amid rising deal flow.

Threats

• Regulators from Alabama to Montana are warning that crypto market-structure legislation currently before Congress could diminish their ability to pursue wrongdoers. The draft of the Senate’s market-structure bill doesn’t give state agencies implicit authority to supervise crypto companies and changes the definition of what an investment contract.
• Abu Dhabi’s Agriculture and Food Safety Authority has reaffirmed a ban on cryptocurrency mining across farms in the emirate, warning that violators face stiff penalties and disconnection from government services.
• The European Systemic Risk Board (ESRB) has passed a recommendation to ban multi-issuance stablecoins, which are stablecoins issued jointly in the bloc and other jurisdictions. The proposed ban was championed by the European Central Bank, and the ESRB guidance will pressure the region’s authorities to implement the restrictions or explain how financial stability can be preserved in their absence.

Defense and Cybersecurity

Strengths

• CoreWeave signed a $14.2 billion contract with Meta to provide Nvidia Blackwell GPU servers, while Samsung and SK Hynix joined OpenAI’s Stargate initiative. This reinforces leadership in AI infrastructure and confirms the explosive growth in demand for computing power.
• Western Digital surged over the past week after strong earnings beat expectations, analysts sharply raised price targets, and demand for AI-driven cloud storage fueled optimism. The company also boosted HDD prices, adding to momentum as investors bet on continued revenue growth.

• The best performing stock in the XAR ETF this week was Archer Aviation, rising 24.68%, after its Midnight eVTOL aircraft set a new record by reaching 7,000 feet in test flights, boosting investor confidence.

Weaknesses

• The Pentagon’s Replicator program, designed to rapidly deploy “cheap, smart” drones, has been slowed by bureaucratic hurdles and technical flaws. Falling behind schedule raises doubts about the ability of the U.S. to adapt quickly to the new era of drone warfare.
• Firefly Aerospace suffered a major setback when its Alpha rocket exploded during testing in Texas. The failure undermines its planned cooperation with Lockheed Martin and weakens confidence in private space contractors.
• The worst performing stock in the XAR ETF this week was AAR Corp, declining 5.26%, after announcing a 3 million share public offering, which raised investor concerns about dilution and pressured the stock.

Opportunities

• Lockheed Martin expanded its global F-35 fleet commitment with an agreement to deliver up to 296 new jets starting in 2026. The deal secures multi-year revenue streams and keeps production lines fully engaged.
• Canada launched a new Defence Investment Agency to speed up procurement and strengthen domestic industries like aerospace and shipbuilding. This opens new opportunities for local suppliers and international defense collaborations.
• Alphabet and IBM are ramping up digital infrastructure. Alphabet is building a $4 billion data center in Arkansas, while IBM and AWS launched an innovation hub in Saudi Arabia. These moves enhance global cloud capacity and create fresh growth avenues for tech leaders.

Threats

• Russia has upgraded its Iskander-M and Kinzhal missiles to outmaneuver Patriot air defenses, cutting Ukraine’s interception rate from 37% to just 6%. This poses a serious challenge to NATO defense systems and demonstrates Moscow’s ongoing technological advances.
• Cyber risks continue to intensify organizations using Oracle’s E-Business Suite received extortion emails linked to the Cl0p group. The campaign underscores that even the largest enterprise systems remain vulnerable to persistent cyberattacks.
• Intel’s $28 billion Ohio semiconductor plant has been delayed to 2030, while lawmakers are pressing for stricter “one chip made in U.S. for every chip imported” rules with potential 100% tariffs. These setbacks and policy risks highlight the fragility of U.S. semiconductor strategy at a time of intensifying global competition.

Gold Market

This week gold futures closed at $3,908.20, up $99.20 per ounce, or 2.60%. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week higher by 3.24%. The S&P/TSX Venture Index came in up 3.14%. The U.S. Trade-Weighted Dollar fell 0.42%.

Strengths

• The best-performing precious metal this week was gold, up 2.60%. Gold and silver are rising amid the U.S. government shutdown. Sustained gains will depend on increased investment in bullion-backed ETFs, which grew by 111 tons (3.8%) last month, according to Bloomberg.
• Zijin Gold’s IPO retail portion was 240x oversubscribed, and the stock closed up 51.4% in gray-market trading, according to J.P. Morgan. While strong demand was expected after EMAS’s raise last week, the key debate now is how to position around parent company Zijin Mining (2899 HK), which is up 127% YTD.
• Westgold Resources expects annual output to rise to over 470,000 ounces by FY28, from 326,000 in FY25, driven by higher-grade ore and better mine feed. With 80% of future supply from current reserves and a fully funded balance sheet, the company anticipates margin improvements despite all-in sustaining costs near A$2,500/oz.

Weaknesses

• The worst-performing precious metal this week was palladium, down 1.65%. The U.S. Department of Commerce delayed its preliminary decision in the countervailing duty probe on Russian palladium imports to December 29, 2025, citing complex subsidy issues raised by Stillwater Mining and the United Steelworkers Union. The delay slows U.S. trade action aimed at countering Russia’s subsidized supply, which has long supported palladium’s price premium.
• St. Barbara Gold has yet to receive a proposal for its Atlantic assets that offers shareholders adequate participation in the potential value of the 15-Mile Processing Hub Project.
• Centerra management believes its assets are undervalued by the market due to misunderstandings around its molybdenum strategy and past operational challenges, particularly at Mt. Milligan.

Opportunities

• Bank of America believes silver’s recent outperformance reflects a catch-up trade to gold. In extended gold bull markets, silver typically lags early but later outperforms, often by 1.5–2.0x relative to gold.
• Newmont announced that CEO Tom Palmer will retire on December 31, 2025. Natascha Viljoen, currently President and COO, will succeed him as President and CEO on January 1, 2026, and join the Board. Viljoen, who joined Newmont in 2023, brings over 30 years of global mining experience, including as former CEO of Anglo American Platinum, according to Canaccord.
• The gold-to-silver ratio has declined to 81.6x from its April 2025 peak of 104.7x (a 22% drop), though it remains above the historical average of 70x. Applied to current gold prices, the average implies a silver price of $54/oz, with a ±1.5 standard deviation range of $42–$74/oz, according to Canaccord.

Threats

• Barrick Gold announced the immediate departure of CEO Mark Bristow. Mark Hill, with the company since 2006 and previously overseeing Latin America and Asia Pacific, has been appointed Interim President, CEO, and Group COO. BMO believes this board-led decision may reflect frustration over Barrick’s underperformance relative to peers. Some speculate whether the board itself will face scrutiny for acting too late.
• CIBC notes that initial capital costs for Dundee Precious Metals’ Loma Larga project have risen from $316M (2021) to $593M, due to sector-wide inflation. However, a 35% increase in commodity price assumptions offsets the higher capex, supporting a solid 18.1% IRR. Permitting remains a potential hurdle.
• The unusually smooth gold rally may signal market vulnerability. Historically, gold climbs come with sharp pullbacks—2023 saw five corrections of 6–10%. Bloomberg notes the lack of recent volatility may reflect investor conviction in further upside, but it also limits healthy resets.

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This commentary should not be considered a solicitation or offering of any investment product. Certain materials in this commentary may contain dated information. The information provided was current at the time of publication. Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/2025):

Deutsche Lufthansa AG

Scorpio Tankers Inc.

Boeing Co/The

AP Moller- Maersk A/S

Western Digital

Tesla

Royal Caribbean

Nutrien

BP Plc

TotalEnergies

Exxon Mobil Corp.

Freeport McMoRan

Westgold

Barrick Gold

St Barbara Gold

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.

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