Gold is a popular commodity and creates a lot of opportunities for investors. You can trade gold futures, gold indexes, and even buy or sell gold itself. And while there are quite a few ways to invest in gold, including gold ETFs, most people focus on gold as a commodity.
However, there is an entire industry devoted to the mining of the precious metal. So, if you want to target the gold mining sector, you have a few options as well. You can buy or sell stock of gold mining companies like AngloGold (AU) or Barrick Gold (ABX). You could also target a gold mining index like the XAU (which I used to trade on the Philadelphia Stock Exchange Floor – PHLX), and of course you can always trade gold mining ETFs, which is why you reading this article.
Instead of having to decide which gold mining stocks are the right ones to purchase or battling to fill your index basket at the desired price, with one simple transaction, you can gain instant exposure to the gold mining sector with an ETF, a pre-packaged mini-portfolio of gold mining companies.
So if you’ve decided you want to include gold mining companies in your investment strategy, either to hedge risk, diversify your portfolio, or take advantage of an opportunity based on research, then consider gold mining ETFs. And to help you with your decision, here is a list of gold and other precious metal mining funds…
The ETF tracks the NYSE Arca Gold Miners Index (GDM) and targets companies involved with the mining of gold. The companies can either be large, mid, or small cap stocks. Some of the top holdings include Barrick Gold (ABX), Goldcorp (GG), and Newmont Mining (NEM)
An alternative to GDX, this find tracks the Market Vectors Junior Gold Miners Index. It does focus on gold mining companies, but only small and mid-caps. Some of the holdings include Aurico Gold (AUQ), Alamos Gold (AGI) and Perseus Mining (PRU)
This ETF tracks the Solactive Global Pure Gold Miners Index and holds gold mining companies such as Harmony Gold, Alecer Gold, and AngloGold.
This ETF targets gold explorers instead of miners and follows the Solactive Global Pure Gold Explorers Index. The top holdings in this find are Continental Gold, NovaGold, and Guyana Goldfields.
This fund targets silver miners instead of gold miners and correlates with the Solactive Global Silver Miners Index. Some of the holdings in this ETF are Silver Wheaton, Bear Creak Mining, and Orko Silver.
WCAT - Jefferies TR/J CRB Wildcatters Exploration & Production Equity ETF
Wildcatters tracks the Thomson Reuters/Jefferies CRB Wildcatters Energy E&P Equity Index and focuses on both miners and explorers. Some of the top holdings in WCAT are Rosetta resources (ROSE), Energy Bermuda (EXXI) and Daylight Energy (DAY)
This SPDR targets metal mining companies and tracks the S&P Metals and Mining Select Industry Index. Some of its top holdings include Commercial Metals Company, Reliance Steel and Aluminum, and Nucor Corporation.
Completing the line of gold and precious metal mining and exploration ETFs from Global X, COPX focuses on Copper mining companies and tracks the Solactive Global Copper Miners Index. Some of its top holdings include Quadra FNX Mining, Ivanhoe Mines, and Inmet Mining Corporation.
We also have 6 new mining ETFs for you (I told you to check back)...
Please check this list often as I will update it when new ETFs are launched or delisted. And if you have any questions or concerns, speak to your broker or talk to a financial professional. These ETFs should be well-researched before you make any decisions. Know what it is in each ETF and the risks, too. Watch and see how the funds react to different market conditions and follow any related news regarding the ETF, its holdings, and the gold mining sector.