Investing In Gold Through The Gold Miners ETFs (GDX, GDXJ)

“For investors expecting the gold miners to report strong first quarter earnings this week, now is the appropriate time to gain exposure to gold through the miners. Newmont Mining (NYSE: NEM) will report earnings Tuesday, while Goldcorp (NYSE: GG) and Barrick (NYSE: ABX) report on Wednesday. Combined, these companies account for 38% of the net assets of Market Vectors Gold Miners ETF (NYSE: GDX),” Don Dion Reports From The Street.
 
Dion goes on to say, “In the background are inflation fears. Although they’ve yet to manifest, many investors are convinced that inflation will return in force and that gold will be a good way to hedge their risk. Also working in gold’s favor are emerging markets such as India and China, where economic strength means consumers have rising incomes to support their gold demand. Analysts expect that gold will increase in value in 2010, but the real gains in terms of an investment will be in shares of gold mining companies. In addition to seeing their earnings rise, these firms may see multiple expansion as the sector becomes more attractive. (NYSE: GDX) is still below its 2008 peak as well, even though earnings and revenues have been moving higher in the industry.”

“Investors can try and choose which gold mining company will be able to capitalize on the demand for the commodity best, or they can hedge company-specific risk by choosing an ETF such as (NYSE: GDX). If investors have a bit more risk appetite and want to take a small-cap approach to gold miners, there is the option of going with Market Vectors Junior Gold Miners ETF (NYSE: GDXJ). Both very popular funds have high daily trading volumes, so investors will not have any liquidity concerns with either investment. (NYSE: GDXJ) is generally more volatile though. At the start of 2010, it outperformed during the rally, and then underperformed during the sell-off. Since early March, shares have been outperforming (GDX). Year to date, (GDX) is up 4.3% and (GDXJ) is up 10.9%,” Dion Reports.

We have put together some more details on the Market Vectors Gold Miners ETF (NYSE: GDX) and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) below:

Market Vectors Gold Miners ETF (NYSE: GDX)

The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners index. The fund generally normally invests at least 80% of its total assets in common stocks and American depositary receipts (ADRs) of companies involved in the gold mining industry. The fund is nondiversified.

TOP 10 HOLDINGS ( 73.67% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Barrick Gold Corporation Common (ABX) 16.56
Goldcorp Incorporated Common St (GG) 12.47
Newmont Mining Corporation (Hol (NEM) 10.80
AngloGold Ashanti Ltd. Common S (AU) 5.89
Kinross Gold Corporation Common (KGC) 5.64
Compania Mina Buenaventura, S.A (BVN) 4.88
Agnico-Eagle Mines Limited Comm (AEM) 4.69
Gold Fields Ltd. American Depos (GFI) 4.30
Yamana Gold, Inc. Ordinary Shar (AUY) 4.26
Eldorado Gold Corp Ltd Ordinary (EGO) 4.18

Chart forMarket Vectors Gold Miners ETF (GDX)

Market Vectors Junior Gold Miners ETF (NYSE: GDXJ)

The investment seeks replicating as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index. The fund normally invests at least 80% of total assets in securities that comprise the index. The index tracks the overall performance of foreign and domestic publicly traded companies of small- and medium-capitalization that are involved primarily in the mining for gold and/or silver. The fund is nondiversified.

TOP 10 HOLDINGS ( 36.81% OF TOTAL ASSETS)  
 
Company Symbol % Assets
NEW GOLD INC. (NGD) 5.10
  (AGI) 4.10
Gammon Gold Inc. Ordinary Share (GRS) 4.04
Silvercorp Metals Inc Ordinary (SVM) 3.91
Hecla Mining Company Common Sto (HL) 3.84
  (SMF) 3.59
Coeur d’Alene Mines Corporation (CDE) 3.37
Silver Standard Resources, Inc (SSRI) 3.36
  (SGR) 2.78
Allied Nevada Gold Corp Allied (ANV) 2.72

Chart forMarket Vectors Junior Gold Miners ETF (GDXJ)

Leave a Reply

Your email address will not be published. Required fields are marked *