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Gold Mining Crushing the Market: Best ETFs & Stocks of Q4
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The fourth quarter has been tough for the broader stock market, given myriad woes ranging from lingering US-China trade tensions to global growth concerns to slide in oil price. In fact, all the three major indices slipped into a correction territory and touched new lows for the year in the last trading session (read: Market on Track for Worst December: 5 ETFs Losers).
Additionally, the Fed’s latest FOMC meeting added to the woes, wherein Powell raised interest rates for the fourth time as expected but was less dovish. The central bank trimmed its 2019 rate hike outlook to two from the previous expectation of three. This came as a blow for stocks as the market were anticipating one rate hike for the next year.
Though rising rates is bad news for gold as higher rates diminish their attractiveness (since it does not pay interest like fixed-income assets), the stock market rout brought back the allure for the metal, boosting its demand. This is especially true as the bullion acts as a store of value and hedge against market turmoil. Further, a slew of disappointing economic data across the globe aggravated the threats of global slowdown, making gold more appealing to investors.
Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market.
Given this, we highlight four gold mining ETFs and stocks that have delivered double-digit returns so far this quarter. These could be excellent plays for investors who believe that gold will continue to move higher given the rocky fundamentals.
This is the most-popular and actively traded gold miner ETF with AUM of $10 billion and average daily volume of around 44.7 million shares. The fund follows the NYSE Arca Gold Miners Index, holding 48 stocks in its basket. Canadian firms account for half of the portfolio, while Australia (16.8%) and the United States (16.4%) round off the top three. The fund charges 53 bps in annual fees (read: Market in Correction: 5 ETFs Surviving the Slump).
iShares MSCI Global Gold Miners ETF (RING - Free Report) : Up 13.3%
This ETF follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 37 securities in its portfolio. Here again, about half of the portfolio is allotted to Canadian firms while United States, Australia and South Africa round off the next three with double-digit exposure each. The fund charges 39 bps in fees and expenses and trades in good volume of 259,000 shares per day. It has been able to manage assets worth $192.6 million.
Invesco Global Gold and Precious Metals ETF : Up 12.3%
This fund tracks the NASDAQ OMX Global Gold and Precious Metals Index, which measures the performance of the most liquid, globally traded companies involved in gold and other precious metals mining-related activities. Holding 54 stocks in its basket, Canada takes the lion’s share at 49.4%, followed by Australia (17.5%) and United States (13.4%). It has amassed $25 million in its asset base and charges 75 bps in fees per year. Volume is light at nearly 18,000 shares (read: Will the Rally in Gold ETFs Continue?).
This fund follows the Sprott Zacks Gold Miners Index, holding 27 stocks in its basket. Here again, Canada takes the top spot at 58.6% followed by 21.2% in the United States. The fund has amassed $127.2 million in its asset base and trades in moderate volume of around 41,000 shares a day. It charges 57 bps in annual fees from investors.
AngloGold Ashanti Ltd. (AU - Free Report) : Up 37.4%
This is one of the world's largest unhedged gold producers with operating mines in South Africa, Ghana, and Australia. It has a Zacks Rank #3 and a VGM Score of B. The stock has a market cap of $2.77 billion.
Kirkland Lake Gold Ltd. – Up 26.6%
This company is engaged in the provision of mining and mineral exploration. It has a Zacks Rank #3 and a VGM Score of B. The stock has a market cap of $5.33 billion.
This is a gold streaming company engaged in providing upfront financing for gold mining companies. With a market cap of $841.8 million, it has a Zacks Rank #3 and a VGM Score of F.
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Gold Mining Crushing the Market: Best ETFs & Stocks of Q4
The fourth quarter has been tough for the broader stock market, given myriad woes ranging from lingering US-China trade tensions to global growth concerns to slide in oil price. In fact, all the three major indices slipped into a correction territory and touched new lows for the year in the last trading session (read: Market on Track for Worst December: 5 ETFs Losers).
Additionally, the Fed’s latest FOMC meeting added to the woes, wherein Powell raised interest rates for the fourth time as expected but was less dovish. The central bank trimmed its 2019 rate hike outlook to two from the previous expectation of three. This came as a blow for stocks as the market were anticipating one rate hike for the next year.
Though rising rates is bad news for gold as higher rates diminish their attractiveness (since it does not pay interest like fixed-income assets), the stock market rout brought back the allure for the metal, boosting its demand. This is especially true as the bullion acts as a store of value and hedge against market turmoil. Further, a slew of disappointing economic data across the globe aggravated the threats of global slowdown, making gold more appealing to investors.
Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market.
Given this, we highlight four gold mining ETFs and stocks that have delivered double-digit returns so far this quarter. These could be excellent plays for investors who believe that gold will continue to move higher given the rocky fundamentals.
Market Vectors Gold Mining ETF (GDX - Free Report) : Up 13.9%
This is the most-popular and actively traded gold miner ETF with AUM of $10 billion and average daily volume of around 44.7 million shares. The fund follows the NYSE Arca Gold Miners Index, holding 48 stocks in its basket. Canadian firms account for half of the portfolio, while Australia (16.8%) and the United States (16.4%) round off the top three. The fund charges 53 bps in annual fees (read: Market in Correction: 5 ETFs Surviving the Slump).
iShares MSCI Global Gold Miners ETF (RING - Free Report) : Up 13.3%
This ETF follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 37 securities in its portfolio. Here again, about half of the portfolio is allotted to Canadian firms while United States, Australia and South Africa round off the next three with double-digit exposure each. The fund charges 39 bps in fees and expenses and trades in good volume of 259,000 shares per day. It has been able to manage assets worth $192.6 million.
Invesco Global Gold and Precious Metals ETF : Up 12.3%
This fund tracks the NASDAQ OMX Global Gold and Precious Metals Index, which measures the performance of the most liquid, globally traded companies involved in gold and other precious metals mining-related activities. Holding 54 stocks in its basket, Canada takes the lion’s share at 49.4%, followed by Australia (17.5%) and United States (13.4%). It has amassed $25 million in its asset base and charges 75 bps in fees per year. Volume is light at nearly 18,000 shares (read: Will the Rally in Gold ETFs Continue?).
Sprott Gold Miners ETF (SGDM - Free Report) : Up 10.8%
This fund follows the Sprott Zacks Gold Miners Index, holding 27 stocks in its basket. Here again, Canada takes the top spot at 58.6% followed by 21.2% in the United States. The fund has amassed $127.2 million in its asset base and trades in moderate volume of around 41,000 shares a day. It charges 57 bps in annual fees from investors.
AngloGold Ashanti Ltd. (AU - Free Report) : Up 37.4%
This is an operator of a gold mining and exploration company. With a market cap of $1.1 billion, it has a Zacks Rank #3 (Hold) and a VGM Score of B and a market cap of $1.79 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Gold Fields Limited (GFI - Free Report) – Up 29.3%
This is one of the world's largest unhedged gold producers with operating mines in South Africa, Ghana, and Australia. It has a Zacks Rank #3 and a VGM Score of B. The stock has a market cap of $2.77 billion.
Kirkland Lake Gold Ltd. – Up 26.6%
This company is engaged in the provision of mining and mineral exploration. It has a Zacks Rank #3 and a VGM Score of B. The stock has a market cap of $5.33 billion.
Sandstorm Gold Ltd. (SAND - Free Report) : Up 17.9%
This is a gold streaming company engaged in providing upfront financing for gold mining companies. With a market cap of $841.8 million, it has a Zacks Rank #3 and a VGM Score of F.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>