Gold is commonly utilized by investors as a hedge against market risks such as inflation and geopolitical turmoil. Investors looking for exposure to this safe haven asset have several options, including investing in gold bullion directly or buying gold futures contracts. Another way to gain indirect exposure to gold is by investing in exchange-traded funds (ETFs) that own gold mining companies. Many investors see ETFs as a liquid and low-cost option for gaining exposure to this part of the gold industry.
- The gold mining industry outperformed the broader market over the past year.
- The ETFs with the best 1-year trailing total return are SGDJ, GOEX, and RING.
- The top holdings of these ETFs are Koza Altin Isletmeleri A.S., Hecla Mining Co., and Newmont Corp., respectively.
There are 7 gold miner ETFs that trade in the U.S., excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). These are ETFs that track gold mining stocks, rather than ETFs tracking gold as a commodity. The gold mining industry, as measured by the NYSE Arca Gold Miners Index, has outperformed the broader market with a total return of 23.2% over the past 12 months compared to the S&P 500's total return of 18.7%, as of February 5, 2021. The best-performing gold miner ETF for Q2 2021, based on performance over the past year, is the Sprott Junior Gold Miners ETF (SGDJ). We examine the top 3 best gold miner ETFs below. All numbers below are as of February 8, 2021.
- Performance over 1-Year: 47.2%
- Expense Ratio: 0.50%
- Annual Dividend Yield: 2.15%
- 3-Month Average Daily Volume: 37,049
- Assets Under Management: $130.0 million
- Inception Date: March 31, 2015
- Issuer: Sprott Asset Management
SGDJ tracks the Solactive Junior Gold Miners Custom Factors Index, which gauges the performance of small-cap gold companies with special emphasis given to gold producers having the strongest revenue growth and exploration companies having the strongest stock price momentum. The ETF is comprised of 37 holdings, most of which are domiciled in either Canada or Australia. It follows a blended strategy, investing in a mix of growth and value stocks, primarily of small-cap gold companies. The fund's top three holdings include Koza Altin Isletmeleri A.S. (KOZAL:IST), a Turkey-based gold mining company; Coeur Mining Inc. (CDE), a precious metals mining company; and Victoria Gold Corp. (VGCX:TSE), a Canada-based mineral exploration and development company.
- Performance over 1-Year: 31.1%
- Expense Ratio: 0.65%
- Annual Dividend Yield: 2.88%
- 3-Month Average Daily Volume: 22,568
- Assets Under Management: $66.0 million
- Inception Date: November 3, 2010
- Issuer: Global X
GOEX tracks the Solactive Global Gold Explorers & Developers Total Return Index, which gauges the performance of a basket of global gold exploration companies. The ETF is comprised of 48 holdings, over half of which are based in Canada and another 21% are Australia-based. The fund offers a targeted play on the gold exploration industry. It follows a blended strategy, investing in a mix of value and growth stocks with various market capitalizations. The fund's top three holdings include Hecla Mining Co. (HL), a silver and gold production company; Alamos Gold Inc. (AGI:TSE), a Canada-based diversified gold producer; and Novagold Resources Inc. (NG:TSE), a Canada-based mineral exploration company.
- Performance over 1-Year: 26.2%
- Expense Ratio: 0.39%
- Annual Dividend Yield: 0.87%
- 3-Month Average Daily Volume: 172,689
- Assets Under Management: $462.7 million
- Inception Date: January 31, 2012
- Issuer: iShares
RING tracks the MSCI ACWI Select Gold Miners Investable Market Index, which is composed of global companies that derive the majority of their revenue from gold mining. The ETF is comprised of 42 holdings, more than 53% of which are based in Canada while another 21% are domiciled in the U.S. and 13% are based in South Africa. It follows a blended strategy of investing in a mix of growth and value stocks, mostly of large-cap companies. The fund's top three holdings include Newmont Corp. (NEM), a gold mining company; Barrick Gold Corp. (ABX:TSE), a gold and copper mining company; and Wheaton Precious Metals Corp. (WPM:TSE), a precious metals streaming company.
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