If it was once fair to say that gold mining stocks and ETFs were left for dead then it is now fair to say the resuscitation of these securities has been impressive. In just the past week, the Market Vectors Gold Miners ETF (NYSEArca: GDX), the largest gold mining fund by assets, has surged 17% and that includes Thursday’s 6% gain on volume that was more than double the daily average.
The Direxion Daily Gold Miners 3X Bull Shares (NYSEArca: NUGT), the triple-leveraged equivalent of GDX, soared 18%…just on Thursday. Don’t forget about the PowerShares Global Gold and Precious Metals Portfolio (NasdaqGS: PSAU), which has been impressive in its own right with a five-day gain of 14%. [Have Gold Miners ETFs Finally Found a Bottom?]
PSAU’s 77-stock lineup features many of the same names, though with noticeably different allocations, that are found in GDX. For example, Goldcorp (NYSE: GG), Newmont Mining (NYSE: NEM) and Barrick Gold (NYSE: ABX) combine for 22.8% of PSAU’s weight. Those stocks combine for over 34% of GDX’s weight.
PSAU’s recent “lag” of GDX is in large part attributable to the fund’s 4.45% weight to Australia’s Newcrest Mining. The company, which is the ETF’s fourth-largest holding, took a $5.8 billion writedown earlier this week and saw its credit rating cut to BBB- from BBB by Standard & Poor’s. However, PSAU’s composition does offer plenty of near-term opportunity for investors looking for different spin on precious metals miners ETFs. [Gold Miners ETF to Get New Look Index]
PSAU’s advantages extend beyond the possibility of Newcrest being a rebound play. The PowerShares offering features decent exposure to small-cap mining names. Small-cap stocks represent 17.3% of the ETF’s weight, according to PowerShares data. Earlier this week, it was revealed that next month, GDX’s underlying index will begin excluding companies with market values below $750 million.