BlackRock Gold & General Funds sitting in the IMA Specialist sector are perhaps some of the most volatile.
The sector contains a wide array of funds providing exposure to specific themes. As such, it can be fairly meaningless to compare specialist funds as you could be comparing healthcare funds with financials, oil-exploration or precious-metals funds.
It is a sector where you often see momentum at play. The specialist nature of its constituents means they can sit at the top or bottom of the performance tables for quite some time.
The opportune time to buy these funds is often when they are flat on their back at the bottom of the tables.
Gold funds certainly fit the bill right now, and one of the best known is BlackRock Gold & General.
Over the past decade the price of gold has risen from around $400 (£235) per ounce to $1,300 per ounce. Even considering the falls from a peak of almost $1,900 an ounce in September 2011 it's a significant increase.
This should have been a boon for gold-mining companies. By keeping costs under control and reinvesting profits wisely, the higher gold price should have been converted into higher profits, dividends for shareholders, and ultimately a rising share price.
Unfortunately, as investors will know, this has not been the case. In recent years, management discipline has been lacking. Cash was not reinvested wisely and costs spiralled, eroding profit margins and leaving companies ill-equipped to cope with a fall in the price of gold. Earnings have collapsed and investors lost confidence, resulting in sharp share-price falls.
Earnings have now dropped to such a low level that they are very sensitive to changes in the gold price.
The team at BlackRock don't see valuations getting back to previous levels as there is simply not enough production growth to warrant it.
The fund has a general bias towards larger and medium-sized companies with a distinct preference for mature businesses that are either in or on the verge of production. The general aim is for the portfolio to be diversified, although it's worth being careful here as clearly the fund has significant exposure to gold miners.
At present, approximately 71 per cent of the fund is exposed to gold, 14 per cent to silver and 15 per cent to other metals and mining companies, including platinum, palladium and diamonds.
During 2013 the fund was skewed towards gold-mining companies with high-quality reserves, growing production, and low costs, in the expectation these companies would perform better during a challenging period.
Since the end of 2013 the team has also added to companies undergoing a turnaround, by cutting costs or replacing management. Current holding Barrick Gold Corporation reduced its costs by $2bn in 2013, has resolved structural problems and recently appointed a new chairman.
The fund also has exposure to companies which own royalties in other mining operations. Royal Gold owns a royalty on Barrick's production, giving exposure to Barrick without having to own too much in the shares.
There is also just over 9 per cent of the portfolio invested in Franco Nevada, another royalty company with rights over production from Newmont Mining Corporation and Barrick mines, which are long-life, high-quality assets.
The stock has performed well; the team have stopped adding to the position and is taking profits to add back to the underlying miners which look relatively undervalued.
While the fund has suffered significant losses over the past three years, it has outperformed its benchmark, the FTSE Gold Mines Index. However, this is poor consolation for investors.
I hold the fund myself but I admit my mistake was not to take a profit a few years ago.
Perhaps that is the lesson with specialist funds. If you are enjoying a healthy profit it could be time to walk away.
Despite a significant drop in the market, I don't believe now is necessarily the time to give up.
If anything, you might want to dip a toe in the water or top up existing holdings.
Mark Dampier is head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more details about the funds included in this column, visit www.hl.co.ukReuse content