In the month of October, gold’s price began to trend upward. This jump in the price of the precious metal comes after consecutive drops in its value since May. According to Kitco, the price of gold per ounce on October 12, 2023, was valued at around $1,868. As of Thursday afternoon, prior to market close, the price was seen to be above $1,970.
While this isn’t the highest price gold has been valued at this year, the recent jump it has seen thus far in October reveals it is possibly moving in a positive direction. This can be a good sign for investors looking to get in on this asset class as economic uncertainty is still top of mind for many of them.
In the past, when high levels of unpredictability in the markets occurred, investors would look for exposure to physical gold, as it offers diversification to a portfolio and is often seen as a way to preserve wealth. However, exposure to gold mining companies can also provide a possible opportunistic place for investors to allocate funds when looking for exposure to this precious metal.
VanEck offers a trio of ETFs that can give investors exposure to both physical gold and gold mining companies.
See More: “Millennial Investors Like Gold”
Physical Gold ETF
With gold’s price on an upswing, an ETF offering direct exposure to gold’s price could hold some appeal. The VanEck Merk Gold Trust (OUNZ) tracks the LBMA Gold Price PM Index, which also underlies several of the other physical gold ETFs on the market. However, OUNZ is unique among its peers in the ETF space because investors can trade their shares in the ETF for actual physical gold.
Its expense ratio of 0.25% is nearly 20 basis points cheaper than its ETF Database category’s average. In terms of performance, OUNZ has posted a 6.73% year-to-date return and a 17.93% return in the last year. Over the shorter term, the fund has a 5.53% return month to date.
See More: “How to Gain Inverse Exposure to Gold Miners”
Gold Miner ETFs
VanEck also issues products offering exposure to gold producers rather than the metal itself. The VanEck Gold Miners ETF (GDX) is the largest gold miner ETF on the market. The fund has an AUM of over $11 billion and an expense ratio of 0.51%. It tracks the NYSE Arca Gold Miners Index, which gives investors exposure to large-cap companies in the gold mining space. Gold miner stocks tend to reflect movements in the price of gold but with more volatility.
It has a month-to-date return of 9.44% and a YTD return of 2.76%. In the last year, the fund has posted a 26.85% return.
The issuer also offers the VanEck Junior Gold Miners ETF (GDXJ), which tracks the MVIS Global Junior Gold Miners Index. This index follows small-cap companies in the gold and silver mining space. Small-cap gold miner equities can be more volatile than their large-cap counterparts but also can provide more growth potential.
The fund has an expense ratio of 0.52% and an AUM of close to $4 billion. In the past month, the fund has had a return of 7.29%, and in the past year, it has returned 20.65%
As economic uncertainty continues to be top of mind for investors, coupled with gold’s recent swing in the positive direction, it could fuel their desire to access the asset class that can hedge against any possible market chaos yet to come. The trio of ETFs from VanEck discussed in this article offers multiple angles on getting exposure to gold’s performance.
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