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Gold Sees Best Week in 11 Years: 5 ETF & Stock Winners
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The coronavirus outbreak has been playing foul on Wall Street over the past month, sending broad indices into a tailspin, thus raising the appeal for gold, which is considered a great store of value and hedge against market turmoil. Notably, gold price jumped nearly 9.5% last week, representing the biggest weekly rise since September 2008.
The pandemic has resulted in lockdowns and forced people to stay indoors to contain the spread, putting economies of many nations at risk. Layoffs are surging as businesses scale back or temporarily shut down their operations. State unemployment offices are reporting an unprecedented spike in initial jobless claims. Spending — the engine of the U.S. economy — is collapsing like anything. The latest data showed that a record 3.3 million people filed claims for unemployment in the United States last week while consumer sentiment dropped the maximum in March since October 2008, pushing the U.S. dollar down. This indicates that the worst is behind us (read: ETF Strategies & Best Practices Amid Coronavirus Volatility).
Amid mass closures of private businesses, soaring layoffs and school shutdowns, market participants forecast global recession in the coming quarters. Revenues of restaurants, hotels, movie theaters, gyms, and airlines have been badly hit with many of them on the brink of bankruptcy. Additionally, gold supply is shrinking as refineries slowed or ceased activity due to coronavirus shutdowns. This also drove the yellow metal’s price higher.
Further, ramp up in both fiscal and monetary policies across the globe to combat the sharp economic slowdown due to the COVID-19 pandemic added to the metal’s strength. 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 (read: 5 Surprising ETF Winners Amid Stimulus-Fed Wall Street Rally).
Given this, we highlight five gold mining ETFs and stocks that led the market last week. These could be excellent plays for investors who believe that gold will continue to move higher given the rocky fundamentals.
This fund follows the Solactive Junior Gold Miners Custom Factors Index, which measures the performance of junior gold producers with the strongest revenue growth and junior exploration companies with the strongest stock price momentum. It holds 46 stocks in its basket with Canadian firms making the largest share at 52.6%, followed by Australia (32.6%) and Russia (5.5%). The fund has amassed $37.9 million in its asset base and trades in moderate volume of around 23,000 shares a day. It charges 50 bps in annual fees from investors.
GDXJ is a small-cap centric ETF that tracks the MVIS Global Junior Gold Miners Index. Holding 79 stocks in its basket, Canadian firms dominate the fund’s portfolio at 43.3%, while Australia (23.6%) and South Africa (12.7%) round out the top three. The product has AUM of $3.9 billion and charges 53 bps in annual fees. It trades in heavy volume of around 19 million shares a day on average (read: 5 Best-Performing ETFs of Dow's Biggest Rally in 87 Years).
iShares MSCI Global Gold Miners ETF (RING - Free Report) : Up 19.8%
This ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 35 securities in its portfolio. Canadian firms take half of the portfolio, while the United States and South Africa round out the top three with double-digit exposure each. RING is the cheapest choice in the gold mining space, charging 39 bps in fees and expenses. The fund has been able to manage assets worth $326.2 million and trades in good volume of 344,000 shares per day.
This is the most-popular and actively traded gold miner ETF with AUM of $11.1 billion and average daily volume of around 61.6 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 the United States (18.7%) and Australia (13.8%) and round off the next two spots. The fund charges 52 bps in annual fees.
The ETF provides exposure to companies involved in the exploration of gold deposits and tracks the Solactive Global Gold Explorers & Developers Total Return Index. It is home to 51 stocks, and Canadian firms dominate the fund’s return at 52.7% followed by Australia (24.3%) and the United States (8.2%). The fund is unpopular and illiquid with AUM of $33.5 million and average daily volume of 12,000 shares. Expense ratio comes in at 0.65%.
Gold Standard Ventures Corporation : Up 24.7%
This precious metal exploration & gold mining company is focused on district scale gold discoveries within North Central Nevada. With a market cap of $128.7 million, it has a Zacks Rank #1 (Strong Buy) and VGM Score of F. You can see the complete list of today’s Zacks #1 Rank stocks here.
It is a global leader in gold and mining listings. The stock has a Zacks Rank #3 (Hold) and VGM Score of F. Seabridge Gold has a market cap of $623.6 million.
With AUM of $5.9 billion, this company acquires and manages precious metal streams, royalties, and related interests. It has a Zacks Rank #2 and VGM Score of D.
It is a gold producing and exploration company with gold assets in Brazil and Turkey. It has a Zacks Rank #3 and VGM Score of B. The stock has a market cap of $1.1 billion (read: Economy to be "Awash With Liquidity"? Buy Gold ETFs).
It is the largest gold mining company in the world and is engaged in the exploration, mine development, production, and sale of gold and copper properties. The stock has a Zacks Rank #2 and VGM Score of B. It has a market cap of $34.2 billion.
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Gold Sees Best Week in 11 Years: 5 ETF & Stock Winners
The coronavirus outbreak has been playing foul on Wall Street over the past month, sending broad indices into a tailspin, thus raising the appeal for gold, which is considered a great store of value and hedge against market turmoil. Notably, gold price jumped nearly 9.5% last week, representing the biggest weekly rise since September 2008.
The pandemic has resulted in lockdowns and forced people to stay indoors to contain the spread, putting economies of many nations at risk. Layoffs are surging as businesses scale back or temporarily shut down their operations. State unemployment offices are reporting an unprecedented spike in initial jobless claims. Spending — the engine of the U.S. economy — is collapsing like anything. The latest data showed that a record 3.3 million people filed claims for unemployment in the United States last week while consumer sentiment dropped the maximum in March since October 2008, pushing the U.S. dollar down. This indicates that the worst is behind us (read: ETF Strategies & Best Practices Amid Coronavirus Volatility).
Amid mass closures of private businesses, soaring layoffs and school shutdowns, market participants forecast global recession in the coming quarters. Revenues of restaurants, hotels, movie theaters, gyms, and airlines have been badly hit with many of them on the brink of bankruptcy. Additionally, gold supply is shrinking as refineries slowed or ceased activity due to coronavirus shutdowns. This also drove the yellow metal’s price higher.
Further, ramp up in both fiscal and monetary policies across the globe to combat the sharp economic slowdown due to the COVID-19 pandemic added to the metal’s strength. 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 (read: 5 Surprising ETF Winners Amid Stimulus-Fed Wall Street Rally).
Given this, we highlight five gold mining ETFs and stocks that led the market last week. These could be excellent plays for investors who believe that gold will continue to move higher given the rocky fundamentals.
Sprott Junior Gold Miners ETF (SGDJ - Free Report) : Up 24.3%
This fund follows the Solactive Junior Gold Miners Custom Factors Index, which measures the performance of junior gold producers with the strongest revenue growth and junior exploration companies with the strongest stock price momentum. It holds 46 stocks in its basket with Canadian firms making the largest share at 52.6%, followed by Australia (32.6%) and Russia (5.5%). The fund has amassed $37.9 million in its asset base and trades in moderate volume of around 23,000 shares a day. It charges 50 bps in annual fees from investors.
VanEck Vectors Junior Gold Miners ETF (GDXJ - Free Report) – Up 21.3%
GDXJ is a small-cap centric ETF that tracks the MVIS Global Junior Gold Miners Index. Holding 79 stocks in its basket, Canadian firms dominate the fund’s portfolio at 43.3%, while Australia (23.6%) and South Africa (12.7%) round out the top three. The product has AUM of $3.9 billion and charges 53 bps in annual fees. It trades in heavy volume of around 19 million shares a day on average (read: 5 Best-Performing ETFs of Dow's Biggest Rally in 87 Years).
iShares MSCI Global Gold Miners ETF (RING - Free Report) : Up 19.8%
This ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 35 securities in its portfolio. Canadian firms take half of the portfolio, while the United States and South Africa round out the top three with double-digit exposure each. RING is the cheapest choice in the gold mining space, charging 39 bps in fees and expenses. The fund has been able to manage assets worth $326.2 million and trades in good volume of 344,000 shares per day.
VanEck Vectors Gold Miners ETF (GDX - Free Report) : Up 18.6%
This is the most-popular and actively traded gold miner ETF with AUM of $11.1 billion and average daily volume of around 61.6 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 the United States (18.7%) and Australia (13.8%) and round off the next two spots. The fund charges 52 bps in annual fees.
Global X Gold Explorers ETF (GOEX - Free Report) : Up 17.3%
The ETF provides exposure to companies involved in the exploration of gold deposits and tracks the Solactive Global Gold Explorers & Developers Total Return Index. It is home to 51 stocks, and Canadian firms dominate the fund’s return at 52.7% followed by Australia (24.3%) and the United States (8.2%). The fund is unpopular and illiquid with AUM of $33.5 million and average daily volume of 12,000 shares. Expense ratio comes in at 0.65%.
Gold Standard Ventures Corporation : Up 24.7%
This precious metal exploration & gold mining company is focused on district scale gold discoveries within North Central Nevada. With a market cap of $128.7 million, it has a Zacks Rank #1 (Strong Buy) and VGM Score of F. You can see the complete list of today’s Zacks #1 Rank stocks here.
Seabridge Gold Inc. (SA - Free Report) : Up 23.4%
It is a global leader in gold and mining listings. The stock has a Zacks Rank #3 (Hold) and VGM Score of F. Seabridge Gold has a market cap of $623.6 million.
Royal Gold Inc. (RGLD - Free Report) : Up 21.7%
With AUM of $5.9 billion, this company acquires and manages precious metal streams, royalties, and related interests. It has a Zacks Rank #2 and VGM Score of D.
Eldorado Gold Corporation (EGO - Free Report) : Up 21%
It is a gold producing and exploration company with gold assets in Brazil and Turkey. It has a Zacks Rank #3 and VGM Score of B. The stock has a market cap of $1.1 billion (read: Economy to be "Awash With Liquidity"? Buy Gold ETFs).
Barrick Gold Corporation (GOLD - Free Report) : Up 19.6%
It is the largest gold mining company in the world and is engaged in the exploration, mine development, production, and sale of gold and copper properties. The stock has a Zacks Rank #2 and VGM Score of B. It has a market cap of $34.2 billion.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>