Gold was on a rise in June and recorded its best month in three years, climbing about 8%. The rally was primarily driven by hopes of loose monetary policies across the globe and flight to safe haven owing to rising geopolitical tensions and global growth worries.
In particular, the Federal Reserve has opened the door for interest rate cuts as soon as next month. Lower rates will continue to weigh on the dollar against the basket of currencies, raising the yellow metal’s attractiveness as it does not pay interest like fixed-income assets. Additionally, other major central banks have also been adopting easy money policies that have boosted the yellow metal.
A combination of factors including falling yields, trade gyrations between the United States and China as well as escalation in U.S.-Iran tensions spurred demand for the yellow metal as a great store of value and hedge against market turmoil.
Further, gold purchases by central banks have soared this year. Holdings in gold-backed exchange-traded funds are at the highest since 2013, according to data compiled by Bloomberg (read: Should You Buy Gold ETFs Now).
Based on the bullish fundamentals, gold price surpassed the key $1,400 level for the first time since April. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market.
Given this, we highlight five gold mining ETFs and stocks that led the market in June. These could be excellent plays for investors, who believe that gold will continue to move higher given the rocky fundamentals.
iShares MSCI Global Gold Miners ETF RING: Up 21.1%
This ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 35 securities in its portfolio. About half of the portfolio is allotted to Canadian firms while United States, South Africa and Australia round off the next three with double-digit exposure each. The fund charges 39 bps in fees and expenses, and trades in good volume of 195,000 shares per day. It has been able to manage assets worth $240.9 million.
Sprott Junior Gold Miners ETF SGDJ: Up 20%
This fund follows the Sprott Zacks Junior Gold Miners Index, holding 33 stocks in its basket. Canada takes the top spot at 71% followed by the United Kingdom (6%) and South Africa (5%). The fund has amassed $59.3 million in its asset base and trades in moderate volume of around 12,000 shares a day. It charges 57 bps in annual fees from investors (read: Gold Mining ETF (SGDJ) Hits New 52-Week High).
Sprott Gold Miners ETF SGDM: Up 19.6%
This fund follows the Sprott Zacks Gold Miners Index, holding 27 stocks in its basket. Here again, Canada takes the top spot at 77% followed by 9% in South Africa and 6% in the United States. The fund has amassed $170.4 million in its asset base and trades in moderate volume of around 36,000 shares a day. It charges 57 bps in annual fees from investors (read: Best June for Stocks in Decades: 5 Best ETFs).
Global X Gold Explorers ETF GOEX: Up 18.6%
The ETF provides exposure to companies involved in the exploration of gold deposits and tracks the Solactive Global Gold Explorers & Developers Total Return Index. It is home to 56 stocks, and Canadian firms dominate the fund’s return at 52% followed by Australia (26%) and the United Kingdom (12%). The fund is unpopular and illiquid with AUM of $39.2 million and average daily volume of 9,000 shares. Expense ratio comes in at 0.65%.
VanEck Vectors Gold Miners ETF GDX: Up 18.4%
This is the most-popular and actively traded gold miner ETF with AUM of $10.5 billion and average daily volume of around 43.3 million shares. The fund follows the NYSE Arca Gold Miners Index, holding 44 stocks in its basket. Canadian firms account for half of the portfolio, while the United States (18.9%) and Australia (17.4%) round off the top three. The fund charges 52 bps in annual fees.
Eldorado Gold Corporation EGO: Up 59.9%
This is a gold producing and exploration company with gold assets in Brazil and Turkey. The stock has a Zacks Rank #3 (Hold) and VGM Score of F. It has a market cap of $924.2 million.
Novagold Resources Inc. NG: Up 51.9%
It is a gold and copper company engaged in the exploration and development of mineral properties in Alaska and Western Canada. With a market cap of $1.92 billion, it has a Zacks Rank #3 and VGM Score of B. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
New Gold Inc. NGD – Up 48.7%
This company is focused on the exploration and development of the Afton Copper-Gold Project, located 6 miles (10 km) west of Kamloops, British Columbia. It has a Zacks Rank #3 and VGM Score of B. The stock has a market cap of $556.7 million.
Timmons Gold Corp ALO – Up 47%
This gold mining company is engaged in exploration, development and production primarily in Mexico. The stock has a Zacks Rank #3 and VGM Score of C. It has a market cap of $66.1 million (read: Gold ETFs Likely to Rule 2H Irrespective of Fed Rate Cut).
AngloGold Ashanti Ltd. AU: Up 43.7%
It is the largest gold producer at 7 million ounces a year, with reserves of 126 million ounce. With a market cap of $7.3 billion, it has a Zacks Rank #3 and VGM Score of A.
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Sprott Junior Gold Miners ETF (SGDJ): ETF Research Reports
Global X Gold Explorers ETF (GOEX): ETF Research Reports
Sprott Gold Miners ETF (SGDM): ETF Research Reports
VanEck Vectors Gold Miners ETF (GDX): ETF Research Reports
iShares MSCI Global Gold Miners ETF (RING): ETF Research Reports
Eldorado Gold Corporation (EGO) : Free Stock Analysis Report
AngloGold Ashanti Limited (AU) : Free Stock Analysis Report
Novagold Resources Inc. (NG) : Free Stock Analysis Report
New Gold Inc. (NGD) : Free Stock Analysis Report
Timmons Gold Corp (ALO) : Free Stock Analysis Report
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