Gold is commonly utilized by investors as a hedge against market risks including volatility, 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 price of gold has outperformed the broader market over the past year.
- The gold miner ETFs with the best 1-year trailing total return are SGDJ, RING, and GDXJ.
- The top holdings of these ETFs are Lundin Gold Inc., Newmont Corp., and Kinross Gold Corp., respectively.
There are 7 ETFs that trade in the U.S. that are focused on gold mining stocks, excluding leveraged or inverse funds and those with under $50 million in assets under management (AUM). Note that these are ETFs that track gold mining stocks, not ETFs tracking gold as a commodity. The price of gold increased 23.7% in the past year, exceeding the 19.8% 1-year total return of the Russell 1000. While this isn't an exact benchmark for the gold mining stocks represented in these ETFs, gold mining stocks tend to be heavily influenced by the price of gold. The best performing gold miner ETF is the Sprott Junior Gold Miners ETF (SGDJ). Below, we’ll look at the top 3 gold ETFs as measured by 1-year trailing total returns. The performance figures above are as of December 14. Figures below for SGDJ and GDXJ are as of December 15, while figures for RING are as of December 16, 2020.
- 1-Year Trailing Total Return: 51.2%
- Expense Ratio: 0.57%
- Annual Dividend Yield: 0.46%
- 3-Month Average Daily Volume: 24,849
- Assets Under Management: $115.2 million
- Inception Date: March 31, 2015
- Issuer: Sprott Asset Management
SGDJ is a small-cap blended fund that targets the Sprott Zacks Junior Gold Miners Index. The index tracks between 30 and 40 gold mining stocks representing companies with market capitalizations between $250 million and $2 billion. SGDJ has about 37 holdings, with roughly 44% of managed assets dedicated to the 10 largest holdings in the portfolio. The top holdings of SGDJ include Lundin Gold Inc. (LUG:TSE), the Canadian mining company; Argonaut Gold Inc. (AR:TSE), the Canadian gold mining company; and West African Resources Ltd. (WAF:ASX), the Australian gold exploration company targeting properties in West Africa.
- 1-Year Trailing Total Return: 31.5%
- Expense Ratio: 0.39%
- Annual Dividend Yield: 0.87%
- 3-Month Average Daily Volume: 207,265
- Assets Under Management: $465.8 million
- Inception Date: January 31, 2012
- Issuer: iShares
RING is a large-cap blended fund following the MSCI ACWI Select Gold Miners Investable Market Index. The index targets companies in developed and emerging markets that derive the large portion of their revenues from gold mining, although it typically owns companies that invest in but do not operate gold mines. RING holds a portfolio of about 44 equities, with more than 70% of invested assets concentrated in the top 10 holdings. The top holdings of RING include Newmont Corp. (NEM), the world's largest gold mining company; Barrick Gold Corp. (ABX:TSE), the Canada-based gold and copper mining company; and Wheaton Precious Metals Corp. (WPM:TSE), the Canada-based precious metals streaming company which largely focuses on silver.
- 1-Year Trailing Total Return: 27.3%
- Expense Ratio: 0.54%
- Annual Dividend Yield: 0.32%
- 3-Month Average Daily Volume: 8,162,963
- Assets Under Management: $6.0 billion
- Inception Date: November 10, 2009
- Issuer: VanEck
The VanEck Vectors Junior Gold Miners ETF is a multi-cap blended fund targeting the MVIS Global Junior Gold Miners Index, an index of micro- and small-cap gold and silver mining companies. GDXJ often trades as a leveraged play on the underlying gold resources, leaving it subject to significant volatility, though it can be a useful tool for investors looking to profit off of short term increases in gold prices. The top holdings for GDXJ include Kinross Gold Corp. (KGC), the Canadian gold and silver mining company; sponsored ADRs of Gold Fields Limited (GFI), the South African gold mining company; and Northern Star Resources Ltd. (NST:ASX), the Australian gold mining firm.
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