Gold prices (XAU-USD) are up more than 16% year-to-date, as speculators see higher chances of an interest rate cut in September. This seems to be an apt time to research gold investments. Investing directly in the physical yellow metal is a tedious task. Hence, investors can consider Gold ETFs as a cheaper and more diversified way of gaining exposure to the precious metal. We used TipRanks’ ETF Comparison tool for the Best Gold Miners ETFs to compare Sprott Gold Miners ETF (SGDM), iShares Gold Producers UCITS ETF USD (ISGPF), and VanEck Gold Miners ETF (GDX) to find the ETF that could offer the shiniest returns.
TipRanks’ ETF Comparison Tool enables the comparison of ETFs based on several parameters, including AUM (assets under management), funds flow, expense ratio, technicals, dividend analysis, and performance over different periods. Let’s learn more about the three Gold Miners ETFs and which one is the best pick based on the potential price target upside.
Sprott Gold Miners ETF (SGDM)
The Sprott Gold Miners ETF tracks the performance of the Solactive Gold Miners Custom Factors Index, which, in turn, replicates the performance of gold mining companies whose stocks are mainly listed on the Canadian and U.S. exchanges. The companies in this index usually include large-cap gold miners that have high revenue growth, free cash flow yield, and the lowest long-term debt to equity.
Notably, SGDM has the lowest expense ratio of of 0.50% of the three ETFs discussed here. As of July 22, SGDM had 37 holdings in its portfolio with an AUM (assets under management) of $264.93 million. The three largest holdings are Newmont Mining (NEM), Agnico-Eagle Mines (TSE:AEM), and Wheaton Precious Metals (TSE:WPM). These three constitute about 31% of the total portfolio.
On TipRanks, SGDM has a Moderate Buy consensus rating based on 31 Buys, five Holds, and one Sell recommendation. The average Sprott Gold Miners ETF price target of $34.49 implies 17.6% upside potential from current levels.
iShares Gold Producers UCITS ETF USD (ISGPF)
The iShares Gold Producers UCITS ETF seeks to track the performance of the S&P Commodity Producers Gold. This index gives exposure to companies engaged in gold exploration and production. ISGPF has the highest expense ratio of 0.55% among the three ETFs discussed here.
As of July 22, ISGPF had 62 holdings, with an AUM of $1.69 billion. The three largest holdings are Newmont Mining, Agnico-Eagle Mines, and Barrick Gold (TSE:ABX). They represent roughly 30.9% of the total portfolio.
On TipRanks, ISGPF has a Moderate Buy consensus rating based on 53 Buys, eight Holds, and one Sell rating. The average iShares Gold Producers UCITS ETF price target of $19.95 implies 15.2% upside potential from current levels.
VanEck Gold Miners ETF (GDX)
The VanEck Gold Miners ETF seeks to track the performance of the NYSE Arca Gold Miners Index, which in turn tracks the performance of companies from the global gold mining industry. The ETF has a moderate expense ratio of 0.51%.
As of July 22, there were 55 holdings in GDX’s portfolio, with an AUM of $14.37 billion. The top three companies in the ETF, Newmont Mining, Agnico-Eagle Mines, and Barrick Gold (GOLD), contribute 32.3% of the overall portfolio.
Similar to the other two ETFs, GDX has a Moderate Buy consensus rating based on 48 Buys, six Holds, and one Sell recommendation. The average VanEck Gold Miners ETF average price target of $42.79 implies 14.3% upside potential from current levels.
Ending Thoughts
Investing in Gold miners ETFs can be an apt choice for investors with a moderate risk-return profile. Gold is considered one of the best hedges against inflation. Of the aforementioned three Gold ETFs, the Sprott Gold Miners ETF seems the best pick based on the upside potential assigned by analysts. Plus, SGDM offers a yield of 1.18% through a regular annual dividend of $0.35 per unit, making it an attractive investment opportunity.
