While SGDM will not be lacking for established competition, particularly in the form of GDX and the Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ), the new ETF’s timing appears to be decent. As Sprott notes, miners are trading at multi-year lows based on a number of valuation metrics and the stocks have notoriously lagged spot gold for the better part of three years.
That trend is reversing this year as some investors believe last year’s spate of cost-cutting in the industry and the group’s low valuations mean miners have more upside in store. That could be a sign SGDM could be one of the more compelling new sector ETFs to launch this year. [Gold Miners ETFs: Ready to Rally]
Year-to-date, the SPDR Gold Shares (NYSEArca: GLD) is up 6.5%, but GDX and GDXJ are up 20.7% and 32.5%, respectively.
Sprott Gold Miners ETF Holdings
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD.