Monday, June 28, 2010

Van Eck Gold Miners ETF

The Van Eck Gold Miners ETF is a way to invest in Gold Mining stocks and limits your risk to owning an individual company. The risks are much higher when owning an individual company stock and with the mining industry, it is much higher for various reasons. The Van Eck ETF currently holds a total of 31 Gold and Silver miners plus cash reserves.

Mining for precious metals obviously has numerous risks and a lot can happen during the mining process which makes individual companies subject to large price swings based on the latest news.  On the upside, you can reap the benefits of great 43-101 drill results, better overall yields and better than expected quarterly earnings. On the downside, a mine can flood or break down, the yields can be lower than expected, management can hedge their metals as the price increases. Management can also acquire other companies that may not benefit the shareholders for years.

Owning a diversified group of miners lowers your overall risk level and an if an individual company has issues that negatively impact their stock price, it will not have a large affect on the overall ETF's price.

One year chart of Van Eck's Gold Miners index GDX

Here is some information on the Van Eck Gold Miners ETF:

The Gold Miners ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the NYSE Arca Gold Miners Index.

Symbol:  GDX
Average volume: 10.7M
Market Cap: 6.60B
Shares: 120.65M
Div/Yield: .11/.20
Inst own: .48%
Started: 05/06
Return since inception: 6.77%  (See their site for addition details)

Top 10 holdings:
Market Value (USD)
% of net assets
Barrick Gold Corp ABX US27,036,0551,252,580,428
Goldcorp Inc GG US20,299,641922,009,694
Newmont Mining Corp NEM US13,491,059833,335,799
AngloGold Ashanti Ltd AU US9,957,233441,603,284
Kinross Gold Corp KGC US20,613,818377,645,146
Lihir Gold Ltd LIHR US8,911,051349,669,641
Eldorado Gold Corp EGO US18,992,628349,084,503
Cia de Minas Buenaventura SA BVN US8,361,588337,891,771
Randgold Resources Ltd GOLD US3,403,673334,138,578
Gold Fields Ltd GFI US23,816,623333,909,054

For more information, visit their site at: VanEck

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