Uncertainty has riled markets and fueled volatility, causing wide oscillations among equities. To help enhance and diversify a portfolio, investors can look to historically stabilizing assets such as gold.
On the upcoming webcast, Stock Market Fears Shine a Light on Gold, Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors, will weigh-in on the ongoing risks in the market and look to gold-related assets as a way to hedge against further uncertainty.
For instance, the U.S. Global GO GOLD and Precious Metal Miners ETF (NYSEArca: GOAU) is a great way for investors to capture the gold mining space as the smart beta gold miner ETF has been outperforming.
So far this year, GOAU increased 7.9%, whereas the VanEck Vectors Gold Miners ETF (NYSEArca: GDX), the largest ETF dedicated to gold mining stocks, rose 4.2% and SPDR Gold Shares (NYSEArca: GLD), the largest physically backed gold-related ETF, added 2.3%. Meanwhile, the broader S&P 500 Index gained 5.4%.
GOAU’s smart beta indexing methodology may have helped the ETF outperform its peers as it focused on steady revenue streams and diminished risks that could have weighed on the value of other gold miners during the recent bout of weakness.
The U.S. Global GO GOLD and Precious Metal Miners ETF 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.
Related: Top 34 Gold ETFs
Furthermore, the ETF includes a 30% tilt to royalty and streaming companies, which could help investors better manage common risks associated with traditional producers, such as building and maintaining mines, among others. The lower risk may also diminish risk since royalty companies have historically rewarded investors by increasing dividends at a faster pace than the broader equity market.
GOAU’s current top holdings include Wheaton Precious Metals Corp 10.6%, Royal Gold 9.4%, Franco Nevada Corp 9.3%, Harmony Gold Mining 4.4% and Dundee Precious Metals Inc 4.2%.
Financial advisors who are interested in learning more about the gold market can register for the Thursday, January 31 webcast here.