Gold Mining ETFs: What You Need to Know

Neena Mishra Published on July 25, 2019

Gold prices have been rising of late thanks mainly to dovish turn by global central banks and investors’ search for safer assets amid rising market uncertainty and geopolitical tensions. Gold miners are leveraged plays on the metal, as their cash flows and earnings rise significantly with the increase in gold prices.

The gold mining industry saw a spate of M&A activity recently with Newmont Mining (NEM - Free Report) acquiring Goldcorp in January to create the world’s largest gold miner, and Barrick Gold (GOLD - Free Report) buying Randgold last fall. Consolidation should benefit the industry.

The VanEck Vectors Gold Miners ETF (GDX - Free Report) is the first and largest gold mining ETF. Its top holdings include Newmont, Barrick Gold and Newcrest Mining (NCMGY).

The iShares MSCI Global Gold Miners ETF (RING - Free Report) is the cheapest fund in the space, with an expense ratio of 39 basis points. Its top five holdings-- Newmont, Barrick Gold, Newcrest Mining, AngloGold Ashanti (AU - Free Report) and Kirkland Lake Gold —account for almost 53% of the portfolio.

The Sprott Gold Miners ETF (SGDM - Free Report) is a smart beta ETF, which selects gold companies with the highest revenue growth and free cash flow yield, and the lowest long-term debt to equity. The fund recently reduced its expense ratio to 50 basis points.

To learn more about these ETFs, please watch the short video above.

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