In an extended bull market environment, an ETF portfolio that leans toward the largest stocks may expose investors to undue risks. Today’s economic and market environment may be best suited for certain sectors as advisors position client portfolios for a new year.
On the upcoming webcast on Thursday, Jan. 11 (available live and on demand for CE Credit), Where Is Gold Heading In 2018?, Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors, will look at alternative index-based strategies in the precious metals industry as a way to potentially diversify risk and potentially enhance returns.
For example, the U.S. Global GO GOLD and Precious Metal Miners ETF (NYSEArca: GOAU) is a smart beta offering that tracks a specialized or rules-based index to help hone in on quality players in the gold mining space. The underlying U.S. Global GO GOLD and Precious Metal Miners Index uses quantitative analysis to pick stocks, with a particular focus on royalty companies.
The GO GOLD and Precious Metal Miners ETF tries to reflect the performance of the U.S. Global Go Gold and Precious Metal Miners Index, which is comprised of U.S. and international companies that earned at least 50% of their aggregate revenue from precious metals and categorizes components into four “tiers” of precious metals companies based on certain fundamental factors.
Each tier includes those having revenue per employee that is greater than the median for companies whose revenue per employees is in the top 20th percentile of the broader universe. Additionally, the screen also factors in operating cash flow per employee and gross margin.