ETFs’ Golden Children

July 16, 2019

At its current size, the fund isn’t at risk for closure. Plus, RING carries the prestigious iShares brand name. The liquidity is strong, with a spread of 0.13% and an average daily dollar volume of $3.6 million, though its volumes are nowhere near those of GDX and GDXJ.

What would probably make investors—especially traders—take notice is RING’s performance. It’s the top performer over the rest of the funds in the group during the three-month, year-to-date and one-year time periods, and ranks near the top of the category for three- and five-year annualized returns.

RING also saw the most (though still modest) inflows of the gold miners ETFs, pulling in $12 million.

 

For a larger view, please click on the image above.

 

Other Approaches

The Sprott Gold Miners ETF (SGDM) takes a smart beta spin on spreads in the space, selecting stocks based on how high their beta is relative to gold’s spot price, and weighting them by market cap within tiers that are determined by revenue growth and debt-to-equity ratios. It has some exposure to silver miners, but caps that exposure at 20%, according to FactSet.

SGDJ similarly focuses on both gold and silver miners—but in the small cap space—and uses a modified market cap approach that tilts weights based on revenue growth and price momentum. Both funds come with an expense ratio of 0.57%, which is at the upper end of the spectrum. SGDM has a healthy market cap of $172 million, while SGDJ has $61 million in AUM.

Both portfolios tilt heavily to Canada, with the country representing more than 79% of the large cap fund and more than 91% of the small cap product.

 

Ticker 1 Mo 3 Mos YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs
GDX 12.06% 12.40% 21.62% 14.32% -5.16% -0.51% -2.54%
GDXJ 13.21% 7.64% 15.68% 4.81% -9.20% -3.56% NA
RING 13.54% 15.31% 27.19% 15.75% -7.06% -1.54% NA
SGDM 11.67% 12.54% 24.77% 12.36% -8.41% NA NA
SGDJ 13.79% 7.54% 21.91% 1.41% -12.53% NA NA
GOEX 13.58% 9.61% 18.61% 2.64% -8.05% 1.73% NA
GOAU 10.59% 8.85% 24.50% 9.88% NA NA NA
SPY 3.82% 3.94% 20.02% 9.07% 14.02% 10.75% 15.23%

Source: FactSet; data as of 7/10/2019. 3-, 5- and 10-year returns annualized

 

Final Thoughts

Traders and long-term investors should be comfortable with both of the VanEck funds given their size, expense ratios, track records and liquidity.

However, RING is a perfectly acceptable fund, and could have more appeal to long-term investors given that it’s cheaper than GDX by 0.13%.

Contact Heather Bell at [email protected]

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