VanEck Responds To New GDXJ Changes

Issuer of GDXJ says that had the rule changes gone into effect at the end of March, the weighted average market cap of the junior miners index would have increased by 70%.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

One week after making a surprising change to the index underlying the $4.9 billion VanEck Vectors Junior Gold Miners ETF (GDXJ), issuer VanEck commented on what the  rule change could mean for investors.

The company, which runs both the index and ETF, confirmed that the changes to the MVIS Global Junior Gold Miners Index, which go into effect on June 17, will significantly broaden the scope of the index, and by extension, the ETF.

"If the newly announced rule had been in effect as of March 31, 2017, the MVIS Global Junior Gold Miners Index would have included 69 companies (up from 48)," VanEck wrote in a press release on Friday. "The largest company, by market capitalization, would have been $2.9 billion (up from $1.8 billion) [and] the weighted average market capitalization of the MVIS Global Junior Gold Miners Index would have been $1.7 billion (up from $967 million)." 

Indices Remain Distinct

VanEck also compared the MVIS Global Junior Gold Miners Index to the NYSE Gold Miners Index―the index that underlies the $11.7 billion VanEck Vectors Gold Miners ETF (GDX)―highlighting the fact that the two indices remain distinct despite the rule changes.

"The weighted average market capitalization of the NYSE Gold Miners Index, as of March 31, 2017, was $8.9 billion," said VanEck. "Furthermore, based on our analysis, as of March 31, 2017, the MVIS Global Junior Gold Miners Index and the NYSE Gold Miners Index would have shared 37 common constituent stocks. While the two indices would have had 37 stocks that overlap, 66% of the MVIS Global Junior Gold Miners Index's exposure would not have been in NYSE Gold Miners Index weightings." 

The following chart provided by VanEck illustrates the market-cap range of the two indices, the MVIS Global Junior Gold Miners Index (MVGDXJ) and the NYSE Gold Miners Index (GDM):

Contact Sumit Roy at [email protected]

 

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.