Investors often use gold to hedge against geopolitical turmoil or inflation. Investors seeking exposure to this safe-haven asset can choose from buying futures contracts or investing directly in gold bullion. Gold mining companies' ETFs can also be used to gain indirect exposure. ETFs are a low-cost and liquid way for investors to gain exposure to this sector of gold mining industry.
Six ETFs that track gold miners' trade in the United States. These ETFs exclude inverse and leveraged ETFs and funds with less than $50 million in assets under administration (AUM). These ETFs track gold mining stocks and not gold commodities. According to the NYSE Arca Gold Miners Index, gold mining industry has performed significantly below the broader market.
The index's performance has been 8.2% lower than that of the S&P 500, which returned 17.1% as of February 8, 2022. Based on the performance of the ETF over the past year, the U.S. is the best-performing gold miner ETF. Global GO Gold and Precious Metal Miner ETF are the best-performing gold miner ETFs. Below are the top three gold mining ETFs. All numbers are current as of February 8, 2022.
U.S. Global GO GOLD and Precious Metal Miners ETF
- ER: 0.60%
- ADY: 6.20%
GOAU is tracking the U.S. Global GO Gold and Precious Metal Miner Index. This benchmark measures the performance of companies that produce precious metals and minerals through mining, production, passive ownership of royalties, or production streams. The ETF gives exposure to companies that are involved in gold mining industry.
Multi-cap funds follow a mixed strategy that invests in value and growth stocks. Its three largest holdings include Royal Gold Inc., a streaming and royalty company in precious metals; Franco-Nevada Corp. FNV: TSE), a streaming and royalty company that focuses on gold; and Wheaton Precious metals Corp. WPM: TSE, a streaming company in precious metals.
Sprott Gold Miners ETF
- ER: 0.50%
- ADY: 0.31%
SGDM tracks Solactive Gold Miners Custom Factors Index. This index is made up of large-sized companies that are listed on major U.S. and Canadian exchanges. The index focuses on companies with highest revenue, cash flow yield, and long-term debt equity ratio. 72.5% of SGDM holdings are based in Canada. The bulk of the rest is based within the U.S.
The top holdings in SGDM are Newmont Corp., a gold mining company focusing on the exploration and production of gold, copper, and silver; Franco-Nevada; Barrick Gold Corp. (ABX.TSE), a Canadian-based gold mining firm that focuses mainly on the production of copper and gold.
iShares MSCI Global Gold Miners ETF
- ER: 0.39%
- ADY: 1.58%
RING tracks the MSCI ACWI Select Gold Miners Investable Market Index. This index measures global companies that are primarily involved in gold mining. The portfolio includes just over half the companies that are located in Canada. The United States and South Africa receive the largest proportions. RING focuses on large-cap companies and uses a mixed strategy. Its top holdings are Newmont, Barrick Gold, and Wheaton Precious metals.
How Can I Invest In Miners Of Gold?
It is risky to invest in gold mining companies. The gold price is a major determinant of the performance of gold mines. This is often reflected largely. The gold price is only one-factor determining gold mining stocks' success. The profit margin of gold miners is also affected by production costs.
You can invest in ETFs that are gold mining companies with many indices. The size and share of the revenue from gold mining differ from one index to the next. This Investment Guide will help guide you through the iniquities of gold mining indexes, which vary in their methodology and ETFs that follow them. This guide will help you find the best ETFs that suit your needs by ranking them.
