The past six months saw gold’s price rise more than 5%, and it crossed the $2,000 threshold. Additionally, in late 2023 several firms reported that central banks’ gold purchases were closing in on all-time highs. Expectations for 2024 are also quite bullish.
However, this hasn’t translated into inflows for physical gold ETFs. In fact, the SPDR Gold Shares (GLD) saw outflows of more than $3 billion during the six-month time frame according to VettaFi Pro.
Physical Gold ETFs Seeing Outflows
VettaFi Head of Research Todd Rosenbluth shared in a recent piece that some of the “weak sentiment could also be due to the emergence of 10 spot bitcoin ETFs.”
However, despite several physical gold ETFs on the market seeing strong outflows and spot Bitcoin ETFs stealing market share, gold miner ETFs haven’t necessarily faced the same problem of outflows.
The $11.4 billion VanEck Gold Miners ETF (GDX) and the nearly $4 billion VanEck Junior Gold Miners ETF (GDXJ) added roughly $500 million in combined assets during the past six months. GDX saw nearly $285 million in cumulative inflows, and GDXJ pulled in around $215 million, according to VettaFi Pro.
See More: “Why Was 2023 Such a Good Year for Gold?”
Digging Into Gold Miner ETF Performance
GDX has an expense ratio of 0.51%. That’s slightly lower than its FactSet segment average, according to ETFDB.com. GDX tracks the NYSE Arca Gold Miners Index, which reflects the performance of the largest gold mining companies in the world.
GDXJ has an expense ratio of 0.52%. It tracks the MVIS Global Junior Gold Miners Index, which provides exposure to several of the top small-cap gold miners. In addition, much like GDX, GDXJ is global in its scope.
Both funds have posted positive five-year annualized returns. GDX returned nearly 8% while GDXJ has posted a 4.13% return. While these annualized five-year returns are not as high as broader equity funds like the SPDR S&P 500 ETF Trust (SPY) (14.83% return) or even physical gold ETFs like GLD (9.19% return), investors have taken an interest in these funds, as evident in the six-month inflows.
Top Stocks
GDX’s top four holdings are Newmont Corp., Barrick Gold Corp., Agnico Eagle Mines Ltd, and Wheaton Precious Metals Corp. According to VettaFi Pro, each of these companies has posted positive annualized returns for the past five years. Wheaton Precious Metals Corp. performed the best in that time frame, up more than 21%.
Meanwhile, GDXJ’s largest holdings include Kinross Gold Corp., Pan American Silver Corp., Alamos Gold Inc., and B2gold Corp. Kinross Gold Corp is the top performer among those, with an annualized 13.26% five-year return.
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