Which ETF Has the Most Gold?
Investors frequently turn to gold as a safe haven during times of instability, yet owning physical gold can be costly and require much storage space. An exchange-traded fund (ETF) offers an affordable way of accessing this precious metal.
Before selecting an ETF, it is important to carefully evaluate its underlying assets, expense ratio and past performance as well as minimum investment size and liquidity requirements.
VanEck Vectors Junior Gold Miners ETF
Gold prices tend to perform best during times of economic uncertainty and inflation, creating fears about the future and prompting investors to flee toward safe-haven assets like gold as safe haven investments. Furthermore, falling interest rates increase its appeal as people lose faith in yield-generating financial instruments.
Investors can gain access to gold through exchange-traded funds (ETFs) or futures contracts, with VanEck Vectors Junior Gold Miners ETF (GDXJ) serving as one such ETF that seeks daily leveraged results of 200% or -300% of MVIS Global Junior Gold Miners Index performance before fees and expenses.
This ETF holds a portfolio of stocks from companies involved in mining gold and silver, and is market cap weighted, giving larger companies greater representation within its holdings. As of writing, its top holdings include Newmont Mining Corporation, Kinross Gold Corp. and Hecla Mining Company Ltd shares.
Market Vectors Gold Miners ETF
Market Vectors Gold Miners ETF, or GDX, provides access to shares of companies involved with gold mining. When prices of precious metals increase, profits of firms involved with mining increase alongside them – making GDX an excellent way of capitalizing on rising gold prices through profits increases that correlate to gold mined. It uses market capitalization weighting methodology in tracking NYSE Arca Gold Miners Index.
GDX is considered a speculative investment, so it’s best suited for experienced investors who can handle heightened volatility. Performance has often been unpredictable during such times of increased risk.
Gold prices typically perform better during times of financial instability and inflation, as people turn to hard assets such as gold as an insurance policy against risk. They also benefit when interest rates fall as yield-generating investments lose their appeal and safe assets like gold become more desirable. Gold miner stocks, however, typically lag behind these trends owing to fixed costs associated with extracting a certain quantity of precious metals regardless of price fluctuations in gold itself.
Market Vectors Lithium ETF
Market Vectors Lithium ETF (LIT) provides investors with an entry point into the emerging lithium market. This ETF offers exposure to a group of mining companies involved in different aspects of this industry and provides access to a commodity which many experts expect will see its prices surge as it becomes an essential element in emerging technologies.
Establish your financial goals when selecting ETFs to buy or sell. A great way to do this is by setting yourself financial goals – such as saving for a new home purchase or college tuition costs for your children.
Consideration should also be given to an ETF’s expense ratio when making your selection. In general, ETFs tend to offer lower fees than traditional mutual funds and tend to be more cost effective for long-term investors. They’re also easier to trade than individual stocks – though research must still be performed prior to investing as some can have high expense ratios while others could offer reduced expenses.
Market Vectors Mining ETF
Market Vectors Mining ETF owns 16.9 million shares of gold-related companies, predominantly companies involved in mining for gold, silver and other precious metals. Launched in 2006 with an extremely low expense ratio of 51bps.
This ETF offers investors exposure to a diversified portfolio of gold mining companies, designed to replicate as closely as possible the price and yield performance of the NYSE Arca Gold Miners Index – a modified market capitalization weighted index consisting of shares issued by public companies engaged in gold mining worldwide.
Notably, gold miner shares don’t necessarily follow the price of gold, meaning traders have several strategies available to them when trading this group. One such approach is waiting for a channel to form and trading at both its high and low points before jumping back in at any pivot points along its path.