Thread: Using Mining Companies to Participate in the Gold Rush

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  1. #1

    Default Using Mining Companies to Participate in the Gold Rush

    With an overall positive outlook on gold in the stock market at this moment, I feel that it is the perfect time to educate investors about the different types of exchange-traded funds (ETFs) that are focused on or pegged to the precious metal. To serve that end, Ive been shining a spotlight on some of the biggest and best gold funds out there during the last few weeks. This week, I want to present one of the most popular gold funds in the global mining segment, the Market Vectors Gold Miners ETF (GDX).
  2. #2


    Rather than focus on the price of gold or the physical possession of gold bullion, GDXs niche is holding publicly traded companies that are involved in the mining of gold and silver. GDX tracks the NYSE Arca Gold Miners Index, which gives GDX access to almost 30 precious metals mining companies around the globe, including some of the industrys biggest names, with a nice blend of small-, mid- and large-cap stocks represented. Note that some of the firms mine other precious metals besides gold, so GDX is not strictly a gold play. Nevertheless, gold is the primary focus of the fund.
  3. #3


    The resurgence of gold on the global stage has created a kind of monetary flood into related areas and firms, offering a well-timed boost before the encroaching earnings season hits. And mining funds are on the rise, as demonstrated by the 70 jump in GDXs share price since the beginning of the year.
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    GDX has more than $6 billion in total assets and an expense ratio of 0.53, plus a small dividend yield of 0.58.
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    As GDX invests in actual companies and firms, it is different from some gold funds Ive recently spotlighted and I can pass on information about the top holdings in the fund. Top 10 holdings for GDX make up slightly more than 50 of total assets, and include a lot of familiar names if you are familiar with mining companies. Barrick Gold Corp. (ABX) is the largest holding, with 6.78 of assets. It is closely followed by Newmont Mining Corp. (NEM), with 6.62 of assets, and Goldcorp, Inc. (GG), at 6.27 of assets.

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