The ETF also includes a 30% tilt toward royalty and streaming companies, which could help investors better manage many common risks associated with traditional producers, such as building and maintaining mines, among others. Moreover, the lower risk may help diminish risk since royalty companies have historically rewarded investors by increasing dividends at a faster clip than the broader equity market.
“Because they’re not directly responsible for building and maintaining mines and other costly infrastructure, huge operating expenses can be avoided,” according to a U.S. Global research note. “They also hold highly diversified portfolios of mines and other assets, which helps mitigate concentration risk in the event that open of the properties stops producing. As a result, royalty companies have enjoyed a much lower breakeven cost than traditional miners.”
GOAU’s top holdings include Royal Gold Inc 10.6%, Franco Nevada Corp 10.1%, Wheaton Precious Metals Corp 8.9%, Kirkland Lake Gold 5.0% and Premier Gold Mines 4.7%.
The gold miner ETF is a global play on gold miners. Country weights include Canada 50.7%, South Africa 17.1%, U.S. 15.2%, Australia 9.8% and U.K. 7.3%.
Financial advisors who are interested in learning more about the gold mining industry can register for the Tuesday, August 22 webcast here.