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In 2015, gold ETFs witnessed outflows of 133.4 tons compared with 185.1 tons in 2014. Overall investment demand in gold went up 8% year over year in 2015 as modest growth in bar and coin demand countered smaller outflows from ETFs. Even though outflows from gold backed ETFs persisted in the year, it slowed down from prior years.
This year saw a turnaround with gold regaining its status as a safe haven asset amid global growth concerns and continued bearishness in the stock market. Gold prices have been trending up lately, making it the best performing commodity this year after three successive years of losses. Prices of the yellow metal jumped above the psychologically important level of $1,200 an ounce as investors flocked for safety. (Read: Ride the Gold Rally with Best Stocks & ETFs)
As chances of a series of rate hikes become slimmer this year, the demand for gold elevates. The metal produces no income but relies on price appreciation to attract investors. Gold prices will also get support from retail demand in the latter part of the year given that it is a seasonally strong period in countries like India and China. India is currently the world’s top gold consumer and lower prices, easing of import norms and better prospects for economic growth will pave the way for rising demand. Moreover, demand from the central bank will support prices as this sector has been remarkably consistent.
Another factor that will eventually be a tailwind for gold is that the supply of the precious metal has already attained peak levels as per reports. Lower gold prices in the past few years and cost pressure had restricted the ability of gold producers to invest in new projects. (Read: Where do Gold Mining ETFs Go from Here)

Production of gold is likely to decline by 3% in 2016, thus ending a seven-year stint of rising output. Lower mined gold supply could help prices navigate north. A positive outlook for the industry reinforced by expectations of earnings growth eventually in 2016 makes a good case for the gold mining industry and its related ETFs.  (Read: Best Ways to Invest in Gold Now—Metal or Miners ETFs)
ETFs to Tap the Sector
Below, we highlight the ETFs in this sector in greater detail for those seeking opportunities to make a gold-mining ETF play at this time.
Market Vectors Gold Miners ETF (GDX)

GDX has assets under management of $6.26 billion and a trading volume of roughly 99,966,961 shares a day. The fund charges an expense ratio of 53 basis points a year with a dividend yield of 0.62%.
The ETF was formed on May 15, 2006, to track the NYSE Arca Gold Miners Index. The Index provides exposure to publicly traded companies worldwide that are involved primarily in gold mining, representing a diversified blend of small, mid and large-capitalization stocks. The fund, has invested 54% of the asset base in the top 10 holdings.
Among individual holdings, top stocks in the ETF include Barrick Gold Corporation (ABX), Newmont Mining Corporation (NEM) and Goldcorp Inc. (GG) with asset allocation of 8.09%, 6.83% and 5.94%, respectively.
Market Vectors Junior Gold Miners ETF (GDXJ - Free Report)
Another popular choice in the gold miners ETF market is GDXJ, a fund tracking the Market Vectors Junior Gold Miners Index, which provides exposure to small- and medium-capitalization companies that generate at least 50% of their revenues from gold and/or silver mining. The product has $1.70 billion in assets with a daily volume of 16,844,730 shares. It charges 55 basis points in annual fees with an annual dividend yield of 0.56%.

The fund’s top 10 holdings comprise 44% of its asset base. OceanaGold Corporation (OGC.TO), Northern Star Resources Limited (NST.AX) and Evolution Mining Limited (EVN.AX) occupy the top three positions in the fund with asset allocation of 5.84%, 5.66% and 4.52%, respectively.
Global X Gold Explorers ETF
The fund seeks to match the performance and yield of the Solactive Global Gold Explorers Index, which tracks companies actively involved in gold exploration. Formed in November 2010, the ETF now manages assets worth $33.52 million. With a daily volume of 15.440 shares per day, the fund charges 65 bps in annual fees and has a dividend yield of 9.09%.
Its top 10 holdings comprise 67 % of assets. First Mining Finance Corp. (FFMGF), OceanaGold Corporation and NovaGold Resources Inc. (NG) command the top three positions in the basket representing 10.29%, 8.78% and 6.77% of net assets, respectively.
iShares MSCI Global Gold Miners (RING - Free Report)
The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI ACWI Select Gold Miners Investable Market Index. This index measures the equity performance of companies in both the developed and emerging markets that derive the majority of their revenues from gold mining. The index also includes companies that do not hedge their exposure to gold prices.
The ETF has over $79.03 million in AUM and a daily volume of about 417,755 shares. It is also a low-cost pick with an expense ratio of 39 basis points a year. It has a dividend yield of 0.66%.
The fund debuted in January 2012 and currently has 19 companies in its basket, with the top 10 holding 54% of the assets. The top stocks include Goldcorp, Agnico Eagle Mines Limited (AEM) and Kinross Gold Corporation (KGC) with asset allocation of 8.90%, 4.26% and 4.22%, respectively.
PowerShares Global Gold & Prec Mtls ETF (PSAU)
PSAU was launched in September 2008 and has been designed to track the NASDAQ OMX Global Gold & Precious Metals Index. The ETF has over $21.43 million in AUM and a daily volume of about 10,130 shares. It is a bit pricey, charging investors 75 basis points on an annual basis. The fund fetches a dividend yield of 0.52%.
This fund has a total holding of 23 stocks with the top 10 comprising 49% of assets. Among individual holdings, Barrick Gold, Newmont Mining and Goldcorp occupy the top three positions with an asset share of 10.57%, 8.12% and 6.87%, respectively.

Sprott Gold Miners ETF (SGDM - Free Report)
Launched in July 2014, SGDM tracks the Sprott Zacks Gold Miners Index, which is a rules based index that assigns weightings on the basis of fundamental factors such as earnings and balance sheet growth.
SGDM currently has $147.46 million in AUM and an average trading volume of about 128.475 shares. It charges 57 basis points in annual expense and has a dividend yield of 1.11%.
The fund currently holds 25 stocks with top 10 holdings comprising 72% of its asset base. Among individual holdings, Franco-Nevada Corporation (15.69%), Agnico Eagle Mines Limited (13.86%), Goldcorp (13.58%) occupy the top three positions.
ALPS Sprott Junior Gold Miners ETF (SGDJ - Free Report)
SGDJ seeks to deliver exposure to the Sprott Zacks Junior Gold Miners Index. This factor-based index aims to track the performance of small-capitalization gold companies whose stocks are listed on major U.S. and Canadian exchanges. The ETF has over $33.77 million in AUM and a daily volume of about 25,457 shares. It charges investors 57 basis points on an annual basis with a dividend yield of 0.62%.
This fund has a total holding of 18 stocks with the top 10 comprising 43% of assets. Among individual holdings, Sibanye Gold Limited (SBGL), Yamana Gold, Inc. (AUY) and New Gold, Inc. (NGD) occupy the top three positions with an asset share of 12.38%, 6.82% and 4.40%, respectively.

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