5 Mining ETFs Your Broker Forgot to Mention (PSAU, GLDX, RING)
Sometimes it's a good thing, sometimes it's a bad thing, but it's clear that sentiment can change on a dime in this market. That has certainly proven to be a good thing recently for the shares of many precious metal miners and the ETFs that track them.
Left for dead as recently as mid-May, it appears as though the miners not only have their respective acts together, but that they want to participate in the upside being offered by the metals they extract from the earth as well.
Since May 15, the returns offered by the three major precious metal mining ETFs are nothing short of staggering and the numbers are all the more impressive when remembering this is a risk of, "let's discard anything high beta" market environment. Since May 15, the Market Vectors Gold Miners ETF (NYSE: GDX), the largest precious metals mining ETF, has jumped more than 18%. GDX's junior counterpart, the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) is up more than 13% while the Globla X Silver Miners ETF (NYSE: SIL) is flirting with a gain of 11%.
That trio is the "Big 3" of precious metals mining funds, but there are other options to consider in this space, some of which your broker is probably neglecting to mention.
Global X Gold Explorers ETF (NYSE: GLDX)
For all the fanfare that mining ETFs have been subject to, the Global X Gold Explorers ETF has flown under the radar since its November 2010 debut. Today, the fund has almost $31.5 million in assets under management and has surged almost 15% in the past two weeks. As of this writing on June 6, GLDX is up almost 4% on volume that's nearly double the daily average indicating investors are starting to warm to this sub-$10 fund.
GLDX is in fact quite different than GDX. The Global X fund offers no exposure to U.S.-based companies as Canada and Australia combine for essentially all of the fund's country weight. GLDX's top-10 holdings account for about 56% of the fund's weight and the ETF has an expense ratio of 0.65%.
Global X Pure Gold Miners ETF (NYSE: GGGG)
The "Quad G's" is now 15 months old and isn't all that large with just $4.4 million in AUM, but this could be the time the unheralded fund solidifies itself. Up 15.2% since May 15, GGGG has outperformed GLDX and GDXJ over that time. GGGG is also cheaper than GLDX with an expense ratio of 0.59%.
Home to almost 30 stocks, GGGG's country allocation is heavily tilted toward Canada and South Africa as those countries represent over 60% of the fund's weight. U.S. investors are probably familiar with some of the fund's top-10 holdings such as Eldorado Gold (NYSE: EGO), Kinross Gold (NYSE: KGC) and Allied Nevada (NYSE: ANV).
Perhaps the most important thing to note about GGGG is that it has one of the lowest correlations to gold of any mining ETF, as ETFdb.com recently noted.
PowerShares Global Gold and Precious Metals Portfolio (Nasdaq: PSAU)
The PowerShares Global Gold and Precious Metals Portfolio has been around for almost four years and since this fund is a direct competitor to the dominant GDX, it often goes ignored. PSAU and GDX do have plenty of overlap in terms of holdings. For example, Barrick Gold (NYSE: ABX), Newmont Mining (NYSE: NEM) and Goldcorp (NYSE: GG) are top-10 holdings in both ETFs.
PSAU's 14.1% jump since May 15 is impressive, but that lags GDX, a situation we suspect is attributable to GDX's larger weights to select gold miners. The aforementioned trio of stocks accounts for over 43% of GDX's weight, but barely more than 25% of PSAU's girth.
iShares MSCI Global Silver Miners Fund (NYSE: SLVP)
The iShares MSCI Global Silver Miners Fund came to market earlier this year as a direct rival to the Global X Silver Miners ETF, but SLVP has struggled to attract assets. That should change as sentiment towards mining funds improves and it should be noted SLVP does have an advantage of SIL: The iShares product is cheaper. Still, it can't be ignored that since May 15, SLVP is up almost 6% (nice), but SIL is up almost 11% (better).
iShares MSCI Global Gold Miners Fund (NYSE: RING)
Home to one of the more appropriate tickers in the ETF universe, the iShares MSCI Global Gold Miners Fund debuted at the end of January as a direct rival to GDX and PSAU. Competing with GDX's first-to-market advantage is tough as that fund has almost $9 billion in AUM.
To RING's credit, it has almost $31 million in AUM and is cheaper than both GDX and PSAU while holding many of the same stocks. More importantly and almost completely under the radar, RING has surged almost 18% since May 15, making it the second-best performer of all the funds we've highlighted here behind only GDX.
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