American gold bars stand on display during a preview of “Gold”, a new exhibition dedicated to the highly prized mineral at the American Museum of Natural History in New York, November 15, 2006. The exhibit opens November 18 and runs through August 19
A gold miner exchange traded fund that specializes in exposure to gold mining royalties has been standing out. This as gold wraps the first quarter with a gain of about 1.4%.
Continue Reading Below
The U.S. Global GO GOLD and Precious Metal Miners ETF (NYSEArca: GOAU), a smart beta offering that tracks a specialized or rules-based index to help hone in on quality players in the gold mining space, has increased 3% over the past month while the S&P 500 declined 4%.
| Ticker | Security | Last | Change | %Chg |
|---|---|---|---|---|
| GOAU | ETF SERIES SOLUTIONS US GLOBAL GO GOLD & PRECIUS | 12.53 | -0.25 | -1.96% |
The underlying U.S. Global GO GOLD and Precious Metal Miners Index uses quantitative analysis to pick stocks, with a particular focus on royalty companies. The GO GOLD and Precious Metal Miners ETF tries to reflect the performance of the U.S. Global Go Gold and Precious Metal Miners Index, which is comprised of U.S. and international companies that earned at least 50% of their aggregate revenue from precious metals and categorizes components into four “tiers” of precious metals companies based on certain fundamental factors.
Each tier includes those having revenue per employee that is greater than the median for companies whose revenue per employees is in the top 20th percentile of the broader universe. Additionally, the screen also factors in operating cash flow per employee and gross margin.
“GOAU is a dynamic, rules-based ETF that seeks to invest in both junior and senior metal miners with strong balance sheets and skilled management teams. Companies that rely primarily on debt to finance their business are eliminated from the index,” according to a U.S. Global note.
Advertisement
The World of ETFs
Furthermore, the ETF includes a 30% tilt to royalty and streaming companies, which could help investors better manage common risks associated with traditional producers, such as building and maintaining mines, among others. The lower risk may also diminish risk since royalty companies have historically rewarded investors by increasing dividends at a faster pace than the broader equity market.
