As a multitude of macroeconomic problems continue to persist, investors have flocked to a variety of safe haven asset classes over the last year. Perhaps none has captured investor's fascinations more than gold. Holdings in the precious metal have steadily risen, and funds like the ETFS Asian Gold Trust (Nasdaq:AGOL) have exploded in popularity. So far, prices for the yellow metal are up about 18% in 2011, and many analysts are calling for higher gold prices to continue. To that end, some investors have sought to add extra gold exposure via the mining firms within the sector. However, much of that focus is set squarely on a few funds. For those looking for gold miner exposure, two exchange-traded funds (ETFs) from an upstart firm could be better choices.

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Alternative Access to Gold
With the continuing pressures facing the global economic situation, investors may want to look at the gold miners. Generally, commodity-based equities show a positive correlation to the spot price of the underlying resources they harvest. For the gold miners, a 1% increase in the price of gold will often equal a greater than 1% increase in operating income. Due to the miners' production cost structure, often with considerable fixed expenses, these companies can act as a leveraged play on gold prices, and these nuances give the gold miners a unique risk-return profile relative to physical gold prices. In addition, gold mining stocks are typically more volatile than the physical metal. This increased volatility can mean higher profits for investors in up markets.

With these benefits in mind, investors have flocked in spades to a pair of Van Eck ETFs. Both the
Market Vectors Gold Miners ETF (ARCA:GDX) and Market Vectors Junior Gold Miners ETF (ARCA:GDXJ) have nearly $11 billion in assets under management split between the two, and have trade volumes in the millions of shares. However, a discussion of gold mining equity funds doesn't need to stop with these two behemoths. Smaller ETF issuer Global X has put forth two competing funds that have the potential to provide investors with some good alternatives in the sector.

Pure and Extra Small
One of the major criticisms of the two Van Eck ETFs is that they are not "pure" gold-based mining funds. Many of the firms, in the funds, receive a portion of their earnings from other metals such as silver or copper. For example, the Market Vectors Gold Miners ETF counts royalty firm Silver Wheaton (NYSE:SLW) as its 12th largest holding. In 2010, silver sales for the firm accounted for nearly $400 million in revenue. Gold, however, accounted for just $30 million. Other holdings include Silver Standard Resources (Nasdaq:SSRI) and Pan American Silver (Nasdaq:PAAS). The ETF is more of generalized precious metals mining fund, which in itself isn't necessarily a bad thing. But, for investors thinking they are just getting a gold only play could be in for shock.

The Global X Pure Gold Miners ETF (Nasdaq:GGGG) hopes to circumvent this. The fund's mandate and index tracks miners who receive over 95% of their total revenues from strictly gold mining. This creates a different overall portfolio of 30 miners, with only three of the same top 10 holdings. While the fund has dropped, along with the general stock market, the long-term picture for the Global X fund could be rosier, as it should offer more targeted exposure to rising gold prices.

Since the industry's supply peak in the late 1990s, gold production has been on a downward trend as discoveries of large, multi-million ounce deposits have decreased. The job of finding new sources of supply has been given to the junior miners. As a source of future mergers and acquisitions for the larger firms, these smaller firms are vital to the gold supply chain. The Global X Gold Explorers ETF (Nasdaq:GLDX) takes the small approach, and bets on 28 different micro- and small-cap gold-based miners such as Rubicon Minerals Corporation (NYSE:RBY) and Chesapeake Gold (OTCBB:CHPGF). Ultimately, the ETF provides the ability to bet on the "Venture Capital Of Gold," and could be a great addition to an investors gold arsenal.

The Bottom Line
With macroeconomic problems still persisting, investors continue to see gold as a safe haven. However, many place their focus on just a few investing options. The previous two Global X ETFs offer portfolios a chance to take advantage of other opportunities in the sector, and could be great long-term additions. (For additional reading, take a look at The Gold Showdown: ETFs Versus Futures.)

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