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:
Holding | Shares | Market Value (USD) | % of net assets |
| Barrick Gold Corp ABX US | 27,036,055 | 1,252,580,428 | 16.44% |
| Goldcorp Inc GG US | 20,299,641 | 922,009,694 | 12.10% |
| Newmont Mining Corp NEM US | 13,491,059 | 833,335,799 | 10.94% |
| AngloGold Ashanti Ltd AU US | 9,957,233 | 441,603,284 | 5.80% |
| Kinross Gold Corp KGC US | 20,613,818 | 377,645,146 | 4.96% |
| Lihir Gold Ltd LIHR US | 8,911,051 | 349,669,641 | 4.59% |
| Eldorado Gold Corp EGO US | 18,992,628 | 349,084,503 | 4.58% |
| Cia de Minas Buenaventura SA BVN US | 8,361,588 | 337,891,771 | 4.43% |
| Randgold Resources Ltd GOLD US | 3,403,673 | 334,138,578 | 4.39% |
| Gold Fields Ltd GFI US | 23,816,623 | 333,909,054 | 4.38% |
For more information, visit their site at: VanEck
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