The allure of gold-focused funds are spilling over into gold miners. Amid the rising price of gold, investors are also seeing opportunities in gold mining funds, which attracted more inflows in March.
“Funds that invest in gold miners are set to attract their largest net monthly inflows in more than a year in March, as record-high gold prices improve firms’ profit outlooks and boost cash flow,” confirmed Mining.com.
When gold prices rally, mining stocks tend to exhibit a latency affect, so investors could be positioning themselves to capture future upside ahead of a move. Gold prices were already rallying in 2024, but associated mining stocks still languished amid inflation.
“Miners still struggled to offset inflation-driven spikes in labour and fuel costs while facing regulatory hurdles such as tax disputes in Mali and project delays in Canada,” Mining.com added. It noted that rather than get mining exposure, investors sought “traditional gold funds that offered a safe haven during the Russia-Ukraine war and escalating trade tariff concerns after Donald Trump won the US election in early November.”
Now, the tide is changing for gold miners. As gold prices continue to hit record highs, investors are more confident that this translates into rising revenue for miners. In turn, they can now mute the effects of inflation in 2025, resulting in higher margins and cash flows.
Get Mining Exposure 2 Ways
Given the potential upside ahead, investors may want to get gold mining exposure now. Searching for gold mining stocks that can provide value can take an abundance of market research. Furthermore, choosing individual stocks can subject investors to overconcentration risk. That said, two ways to get broad-based exposure via are the Sprott Gold Miners ETF (SGDM ) and the Sprott Junior Gold Miners ETF (SGDJ ).
For a diversified approach to gold mining exposure, SGDM is ideal. It seeks investment results that correspond generally to the performance of the Solactive Gold Miners Custom Factors Index. This index tracks the performance of large gold companies found on Canadian and major U.S. exchanges, adding diversified exposure.
On the other hand, nonrisk-averse investors may opt for small-caps. They don’t mind the volatility or growth potential via small-cap companies. As such, SGDJ is their fund to consider. It tracks the Solactive Junior Gold Miners Custom Factors Index, which follows the performance of the small-cap precious metal companies, allowing for greater growth potential.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
Disclosure Information
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal. A “bull” market is one in which prices are rising.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM SGDJ
