In the past week, the price of physical gold has continued to rise. According to Kitco, on October 16, 2023, the price of gold was valued at around $1,922 an ounce, and it began Monday morning just above $1,970. This is a feat worth noting as the precious metal saw a continuous drop in its price for close to six months this year prior to its jump throughout the month of October.
As gold’s increase in price continues to see a swing in a positive direction, so do some of the ETFs that track the precious metal and companies that mine for it. Using data from LOGICLY, we are able to take a look at some of the funds that returned the highest amount in the past week. There are three ETFs that take different angles on the precious metal within the top 10.
Sprott currently issues two of the three gold-related funds on that list. The Sprott Gold Miners ETF (SGDM) has returned 2.81% in the past week, which is the highest among the three gold funds, and fourth on the list overall. Meanwhile, the Sprott Junior Gold Miners ETF (SGDJ) has posted a 2.07% return, giving it the ninth spot in the top-highest-returning funds in the past week, according to LOGICLY.
In this article, we break down several of the key features of the two Sprott gold funds that have benefited from gold’s price rally.
Sprott Gold Miners ETF (SGDM)
SGDM has been around for a little less than 10 years, with an inception date of July 15, 2014. It currently has $257 million in assets and an expense ratio of 0.50%. The fund tracks the Sprott Zacks Gold Miners Index. This index gives investors exposure to large-cap companies within the gold industry. SGDM provides exposure to three economies, with Canada representing more than 85% of its portfolio. It also offers exposure to gold mining companies in the U.S. and South Africa.
Looking beyond last week, it has a nearly 9% return for the 30-day period. In the last 12 months, it returned 24.03%, and over the last four years, it posted a return of 3.19%.
Sprott Junior Gold Miners ETF (SGDJ)
SGDJ has an inception date of March 31, 2015, making it slightly younger than SGDM. The fund has $100 million in AUM and an expense ratio of 0.50%. It gives investors exposure to small-cap companies within the gold mining space by tracking the Sprott Zacks Junior Gold Miners Index. The fund also provides exposure to five different countries. Its heaviest-weighted country is Australia, accounting for 50% of its portfolio. SGDJ also covers equities in Canada (31.16%), the United States of America (9.30%), the United Kingdom (9.01%), and Indonesia (0.53%).
Regarding short-term performance, SGDJ has had a successful October, posting a 7.82% return. In the past year, it has slightly outperformed SGDM, with a 25.79% return. However, it has underperformed SGDM during all other time frames.
If the price of gold continues to rally in the uncertain economic environment, and ETFs that track companies that mine the precious metal exhibit sustainable growth, investors may renew their interest in gold mining equities. Both funds have had negative outflows year to date, but that trend could reverse.
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