Gold futures are flirting with $1,300 per troy ounce Thursday. At $1,300, gold is still a long way from its 2011 highs, but the yellow metal’s recovery in2011 has bolstered once downtrodden exchange traded funds such as the SPDR Gold Shares (NYSE: GLD), last year’s worst ETF in terms of outflows.
However, the real story has been the stunning reversal of fortune for funds such as the Market Vectors Gold Miners ETF (NYSEArca: GDX) and the Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ). GDX and GDXJ are the two largest gold mining ETFs by assets and entered Thursday as two of the 10 best non-leveraged ETFs in 2014. [Good News for Mining ETFs]
However, there are other options for investors to consider among mining ETFs, many of which are not on the receiving end of nearly as much as attention as is bestowed upon GDX and GDXJ. For those looking for a multi-month trade on gold miners, remember that there has never been a year in which gold prices have fallen and the miners have risen, so keep an eye on GLD. [A Rare Trade Emerging in Gold Miners]
Global X Silver Miners ETF (NYSEArca: SIL)
2014 Gain: 19.1%
Comment: With $241.2 million in assets under management, SIL is neither small nor glossed over. It is, in fact, the dominant name among silver mining ETFs. When silver is cooperating, SIL is a good way to profit from that trend. The rub is this is volatile fund with a standard deviation of almost 42%, according to Global X data. SIL’s top three holdings combine for almost a third of the fund’s weight.
PureFunds ISE Junior Silver Small Cap Miners/Explorers ETF (NYSEArca: SILJ)
2014 Gain: 31%
Comment: Despite its diminutive stature, SILJ is locked in a heated competition with another mining fund to wear the crown of 2014’s best ETF. SILJ is the first ETF to explicitly focus on small-cap silver miners and while that means volatility on par with or above that of SIL, there is a key advantage offered by SILJ: The ETF’s ability to pack a big punch in just one or two trading sessions reduces the allure of comparable leveraged ETFs for investors that are not familiar with leveraged products.
Global X Gold Explorers ETF (NYSEArca: GLDX)
2014 Gain: 29%
Comment: GLDX is the ETF fighting with SILJ for top honors among non-leveraged ETF this year. The very fact that GLDX is anywhere the top 10 confirms this ETF’s rebirth. Last year, GLDX was one of the worst non-leveraged ETFs and was reverse split to prop up its flailing share price. GLDX is small with $37 million in AUM. [Last Year’s ETF Laggards Rise in 2014]
iShares MSCI Global Silver Miners ETF (NYSEArca: SLVP)
2014 Gain: 17.2%
Comment: SLVP is SIL’s most direct competitor, but these ETFs are not mirror images of each other. SLVP features a 22.2% weight to Silver Wheaton (NYSE: SLW). That allocation is nearly two and a half times bigger than weight given to SLVP’s second-largest holding.
iShares MSCI Global Gold Miners ETF (NYSEArca: RING)
2014 Gain: 11.4%
Comment: With an easy-to-remember ticker, RING is one of several competitors to GDX. RING holds 38 stocks, but this another top-heavy ETF as Barrick Gold (NYSE: ABX) and Goldcorp (NYSE: GG) combine for over 34% of the fund’s weight.
SPDR Metals & Mining ETF (NYSEArca: XME)
2014: Down 5.4%
Comment: The laggard on this list, the SPDR Metals & Mining ETF is not a dedicated precious metals mining fund. Gold and precious metals miners represent about 24% of XME’s weight, according to State Street data. It is steel, coal and aluminum exposure that is hampering XME, though it should be noted that the ETF has improved dramatically in recent days, gaining 5% since Feb. 7.
PowerShares Global Gold and Precious Metals Portfolio (NYSEArca: PSAU)
2014 Gain: 11.2%
Comment: Entering Thursday, PSAU sported a decent 2014 gain of 11.2%, but when factoring in Thursday’s gain of better than 2%, PSAU has surged more than 10% in just the past week. During that run, PSAU has reclaimed its 200-day moving average. PSAU is home to stocks like Goldcorp, Barrick and Silver Wheaton, but not stock accounts for more than 8.3% of the ETF’s weight. It would take PSAU’s top-five holdings to come close to equaling the weight RING gives to its top-two holdings. [Big Week Ahead for Mining ETFs]
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD.