Asset manager VanEck’s Gold Miners UCITS ETF [LON:GDX] has now reached USD 1 billion in assets under management. This pure-play ETF tracks the performance of the NYSE Arca Gold Miners Index, which consists of the world’s largest public companies that are primarily engaged in the mining of gold and silver.
Commenting on the fund’s volume growth amid the recent gold rally, Martijn Rozemuller, CEO at VanEck Europe said, “Considering the current macroeconomic and geopolitical environment— including lingering inflation despite higher interest rates and ongoing global conflicts— the global demand for gold is as strong as ever.”
- REX Financial to use call writing strategy in new crypto sector ETF
- Don’t take your eyes off the gold price in 2025
- Is Goldman Sachs looking for a buyer for ETF Accelerator?
Given gold’s historical status as the investor-preferred safe haven asset, investors are looking to protect and hedge their portfolios for what’s to come. Additionally, significant increases in central bank reserves have created upward pressure and demand for gold, which has resulted in a bullish outlook this year and beyond.
Investor demand for gold as a safe haven asset is driving up prices. The current price of gold has reached a new all-time high of over USD 2,300 which also benefits gold mining companies, as the rising demand for precious metals is generating more sales and higher profits for them.
“In March, gold mining stocks performed significantly better than bullion,” said Imaru Casanova, Portfolio Manager Gold and Precious Metals at VanEck. “This could be the start of a trend towards reversion to the mean, where gold mining stocks regain their leverage on the gold price and outperform bullion when gold prices rise.”
Prospective investors should nonetheless take into account that the long-term stability of an upward trend in the financial markets remains uncertain and could depend on a variety of factors.
Why buy gold miners ahead of gold?
Shares in mining companies combine the advantages and risks of both exposure to physical gold and income-generating assets, as they can both insulate portfolios against inflation and reduce risks through diversification. Exposure through an ETF offers simple and cost-effective access to this complex market.
The top three holdings in the VanEck Gold Miners UCITS ETF are currently the Newmont Corporation NYSE:NEW, Agnico Eagle Mines Ltd [TSX:AEM] and the Barrick Gold Corporation TSX:ABX. The fund has a current regional concentration in Canada, the United States, and Australia.
The ETF is fully backed and currently contains 53 equities with a total expense ratio (TER) of 53 bps.
VanEck is the world’s largest provider of Gold Mining ETFs by assets under management, with combined fund assets of approximately USD 21 billion (as of 24th May 2024).
