One of the newest entrants to the gold miners exchange traded funds arena is proving to be successful. The Sprott Gold Miners ETF (NYSEArca: SGDM) has eclipsed $100 million in assets under management, according to a statement issued earlier Monday.
SGDM’s ascent to $100 million in assets under management makes the ETF one of the most successful new ETFs to come to market this year. [Another Good Year for New ETFs]
Several factors make SGDM’s asset-gathering acumen even more impressive. First, the ETF debuted in July, meaning the fund has needed less than half of 2014 to gather $100 million in assets. Second, gold prices have stumbled since SGDM debuted. Over the past six months, the SPDR Gold Shares (NYSEArca: GLD) has plunged 10.6%.
Third, the gold miners ETF arena is dominated by a small number of funds, namely the Market Vectors Gold Miners ETF (NYSEArca: GDX), Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) and the Direxion Daily Gold Miners Bull 3X Shares (NYSEArca: NUGT).
SGDM “is the first exchange-traded fund to weight miners on factors other than size. It starts with 25 stocks with “the highest gold beta,” i.e., sensitivity to gold’s price movements, ranks them by market capitalization, then adjusts the ranking based on the companies’ one-year revenue growth and debt-to-equity ratios, penalizing slow-growing overleveraged outfits and rewarding the opposite,” reports Lewis Braham for Barron’s.
SGDM tracks the Sprott Zacks Gold Miners Index, which seeks to emphasize gold stocks with the highest quarterly revenue growth measured on a year-over-year basis and stronger relative balance sheets as measured by long-term debt to equity,” according to Sprott. [New Miners ETF Debuts]