Which ETF Has the Most Gold?
Consider your financial goals and risk tolerance before selecting an ETF with the highest gold content. Certain funds may even qualify as limited partnerships which have different tax implications than individual investments.
ETF investments offer the convenience and cost-efficiency of owning physical gold bullion without the storage hassles. When selecting an ETF to invest in, look for one with a large size and low expenses ratio to optimize returns.
VanEck Vectors Junior Gold Miners ETF
Gold has quickly become one of the top investment choices for many investors, particularly millennials. According to research by State Street Global Advisors, this generation has added it faster than any other age group in their portfolios.
One way investors can gain exposure to gold is through investing in companies that mine it, known as gold miners. Such firms typically involve high risks as the mining operation may fail even before yielding any profits; moreover, being so early stage companies, their share prices tend to fluctuate considerably and therefore it is essential that investors find and evaluate junior mining stocks carefully in order to avoid losing hard-earned money on fly-by-night operations.
VanEck Vectors Junior Gold Miners ETF, or GDXJ, provides exposure to this sector. It seeks to emulate as closely as possible (before fees and expenses) the price and yield performance of MVIS Global Junior Gold Miners Index while investing at least 80% of its assets into securities that comprise that index.
Like other gold ETFs, GDXJ is sensitive to changes in gold’s price, since miners’ profits depend on it; should prices fall suddenly and drastically, their operations could cease production altogether or they might close completely.
Consider dividends when purchasing a gold miners ETF. Mining firms do not typically distribute dividends to their shareholders and instead reinvest the earnings into operating capital – this may result in lower returns compared to other investment options; however, an effective management team could make all the difference for profitability of mining firms.
Due to these reasons, GDXJ may not be suitable for all investors and should only be included as part of a diverse portfolio. Furthermore, this ETF isn’t recommended for investors with fears regarding inflation or financial crises.
Market Vectors Gold Miners ETF
Gold has long been considered a haven during times of economic instability and serves as a hedge against inflation and can help diversify a portfolio. Exchange-traded funds provide an easy and convenient way for investors to gain exposure to gold without purchasing physical bullion; one such ETF is the Market Vectors Gold Miners ETF (NYSE Arca: GDX), providing exposure to several gold mining companies.
GDX ETF holds 49 different companies, with its top holdings being Newmont Corporation, Barrick Gold Corporation and Franco-Nevada Corporation. With an expense ratio of 0.45% and assets growing more than 17 % month over month indicating strong investor interest for precious metal investments like this ETF.
This ETF strives to reflect as closely as possible, before fees and expenses, the price and yield performance of the NYSE Arca Gold Miners Index. This index does not limit its holdings to US-listed companies or exclude firms which hedge their gold exposure with derivatives.
This market-leading fund has seen year-to-date gains of more than 11% and 30-day cash inflows totaling more than $410 million – evidence of investors seeking diversification options to help withstand an unpredictable market environment.
Although gold miners ETFs tend to move in tandem with gold prices, this is not always true. Therefore, it is often prudent to view this ETF as a speculative investment and only consider it if its level of risk suits your risk profile. In order to trade this ETF effectively and maximize potential profits while limiting losses.