Exchange traded funds (ETFs) offer an easy ingress for investors to get gold exposure. With that, research firm ING is forecasting more inflows into gold-focused ETFs in 2025.
The precious metal gained over 26% in 2024, surprising those in the capital markets who weren’t expecting gold’s rally. A flight to safe haven assets amid growing geopolitical tensions added angst to investors who sought gold as a store of value. Additionally, gold prices have been supported by central bank buying and ING is expecting continued purchases in 2025.
Additionally, supporting gold’s rally has been monetary policy easing by the U.S. Federal Reserve. Gold faltered following the U.S. presidential election in the tail end of 2024. Still, its rally could be sustained by rate cuts and subsequently, a weaker dollar.
The aforementioned factors could support another rally in gold’s run, thus supporting inflows into gold ETFs. ING mentioned that global gold ETFs have seen inflows for six straight months. That could also continue in the new year despite the recent price correction the past month.
“Still, looking ahead into 2025, we believe inflows should continue as the Federal Reserve continues to cut rates,” ING noted.
Mining for Opportunities
Getting gold exposure isn’t relegated to just investment vehicles that invest directly in gold. Miners also offer an opportunity for investors to diversify their portfolios with gold mining and exploration companies that can build off the precious metal’s success.
“Gold’s impressive performance throughout 2024 has translated into opportunities for gold stocks and companies involved in gold mining, production, and distribution,” Kitco News mentioned.
That said, while nvestors can opt for individual gold mining stocks, an easier way is via funds that are representative of the market. On that note, consider using the Sprott Gold Miners ETF (SGDM) and the Sprott Junior Gold Miners ETF (SGDJ).
To achieve broad-based exposure, SGDM is an ideal alternative. It seeks investment results that correspond generally to the performance of the Solactive Gold Miners Custom Factors Index. This index tracks the performance of large gold companies found on Canadian and major U.S. exchanges, adding diversified exposure.
Investors who are willing to accept more risk for higher reward can also opt for small-cap companies, which can make amplified moves to the upside when markets trend higher. As such, SGDJ is an ideal option. It tracks the Solactive Junior Gold Miners Custom Factors Index that follows the performance of the small-cap precious metal companies, allowing for greater growth potential.
For more news, information, and analysis, visit the Gold/Silver/Critical Materials Channel.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index. Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management LP or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
