In this article, let´s take a look at Market Vectors Gold Miners ETF (GDX, Financial) which is a favorite ETF for David Einhorn (Trades, Portfolio). As of Dec. 31, 2013, hedge fund Greenlight Capital owned 8.8 million shares.
Market Vectors Gold Miners ETF
Market Vectors Gold Miners ETF is incorporated in the U.S. This vehicle tracks the performance of the Arca Gold Miners Index. It invests in materials stocks of all cap sizes around the world. When looking to the greatest allocation, we can see that this happens in the North American companies, principally in Canada, because most of the fund's holdings are based outside the United States.
Top holding list
The fund's holdings are primarily focused on gold mining, but it also includes some silver miners, such as Silver Wheaton Corp (SLW, Financial).
Let's see the fund´s holding list:
Materials | % Wgt | Market Value | Position | Price | Currency |
GOLDCORP INC | 13,25 | 828.901.673 | 41.403.680 | 20,02 | USD |
BARRICK GOLD CORP | 11,34 | 709.037.788 | 59.284.096 | 11,96 | USD |
NEWMONT MINING CORP | 7,82 | 489.225.102 | 25.387.914 | 19,27 | USD |
FRANCO-NEVADA CORP | 6,65 | 415.785.720 | 7.933.328 | 52,41 | USD |
SILVER WHEATON CORP | 6,16 | 385.460.907 | 18.225.102 | 21,15 | USD |
NEWCREST MINING LTD | 5,1 | 318.970.281 | 36.411.480 | 10,43 | AUD |
RANDGOLD RESOURCES LTD-ADR | 4,92 | 307.767.394 | 4.638.544 | 66,35 | USD |
ELDORADO GOLD CORP | 4,08 | 255.331.648 | 37.604.072 | 6,79 | USD |
AGNICO EAGLE MINES LTD | 3,99 | 249.670.382 | 10.291.442 | 24,26 | USD |
ROYAL GOLD INC | 3,72 | 232.403.833 | 3.399.705 | 68,36 | USD |
KINROSS GOLD CORP | 3,01 | 188.059.038 | 60.082.760 | 3,13 | USD |
ANGLOGOLD ASHANTI-SPON ADR | 3 | 187.368.718 | 21.267.732 | 8,81 | USD |
YAMANA GOLD INC | 2,96 | 185.408.733 | 46.236.592 | 4,01 | USD |
GOLD FIELDS LTD-SPONS ADR | 2,82 | 176.247.627 | 40.703.840 | 4,33 | USD |
CIA DE MINAS BUENAVENTUR-ADR | 2,33 | 145.576.831 | 14.470.858 | 10,06 | USD |
NEW GOLD INC | 1,87 | 116.664.944 | 26.454.636 | 4,41 | USD |
SIBANYE GOLD- SPON ADR | 1,36 | 84.772.041 | 11.790.270 | 7,19 | USD |
ZIJIN MINING GROUP CO LTD-H | 1,32 | 82.724.871 | 306.841.984 | 2,09 | HKD |
PAN AMERICAN SILVER CORP | 1,28 | 80.097.917 | 7.954.113 | 10,07 | USD |
DETOUR GOLD CORP | 1,08 | 67.671.218 | 8.285.900 | 9,29 | CAD |
B2GOLD CORP | 1 | 62.363.511 | 35.636.292 | 1,75 | USD |
CENTERRA GOLD INC | 0,97 | 60.881.606 | 12.410.901 | 5,58 | CAD |
ALAMOS GOLD INC | 0,79 | 49.411.771 | 6.686.302 | 7,39 | USD |
CENTAMIN PLC | 0,76 | 47.386.431 | 60.485.852 | 49,9 | GBp |
HECLA MINING CO | 0,75 | 46.973.189 | 18.348.902 | 2,56 | USD |
AURICO GOLD INC | 0,74 | 46.290.764 | 13.039.652 | 3,55 | USD |
IAMGOLD CORP | 0,74 | 46.498.528 | 19.786.608 | 2,35 | USD |
RIO ALTO MINING LTD | 0,69 | 43.322.885 | 17.352.036 | 2,84 | CAD |
SEMAFO INC | 0,69 | 42.918.087 | 14.529.561 | 3,36 | CAD |
HARMONY GOLD MNG-SPON ADR | 0,65 | 40.499.249 | 22.880.932 | 1,77 | USD |
G-RESOURCES GROUP LTD | 0,58 | 36.412.183 | 1.390.514.944 | 0,2 | HKD |
PRIMERO MINING CORP | 0,57 | 35.775.407 | 8.397.983 | 4,26 | USD |
ALACER GOLD CORP | 0,51 | 32.033.620 | 15.246.127 | 2,39 | CAD |
OCEANAGOLD CORP-CDI | 0,47 | 29.233.108 | 15.820.665 | 2,2 | AUD |
FIRST MAJESTIC SILVER CORP | 0,41 | 25.661.808 | 6.168.704 | 4,16 | USD |
COEUR MINING INC | 0,37 | 22.923.031 | 5.431.998 | 4,22 | USD |
SILVER STANDARD RESOURCES | 0,37 | 23.275.431 | 4.239.605 | 5,49 | USD |
ZHAOJIN MINING INDUSTRY - H | 0,37 | 23.442.166 | 45.891.000 | 3,96 | HKD |
MCEWEN MINING INC | 0,32 | 20.112.039 | 15.712.531 | 1,28 | USD |
ARGONAUT GOLD INC | 0,2 | 12.379.161 | 8.092.699 | 1,74 | CAD |
TOTAL | 100 | 6.254.940.662 | Â | Â | Â |
Total Percentage of Top 10 Holdings: 67.03%
The index composition is reviewed and rebalanced quarterly.
Diversification rules
No single stock can make up more than 20% of the portfolio. In case a stock has more than 4.5% of the portfolio, it is capped at 50% of the index's total assets. Despite the rules, the top three holdings make up almost a third of assets (32.41%).
Principal Ratios
Principal Ratios | % |
Price to Cash Flow | 7,17 |
Price to Book Ratio | 0,95 |
Total Debt to Common Equity | 36,4 |
Current Ratio | 2,29 |
EV-to-EBIT | 10,4 |
PEG | 1,9 |
Other ETFs which constitute global gold securities investments: SPDR Gold Trust (GLD) and Market Vectors Junior Gold Miners ETF (GDXJ, Financial). For investors looking for direct exposure to gold, they should consider iShares Gold Trust (IAU, Financial).
Trailing total returns (as of 11/30/2014)
The fund has generated a total return of -18% in the last five years, -32.26% in the last three years, and -16.82% in the last year. But in November, as we can appreciate it, has an attractive return.
Period | Market Return % | NAV Return % |
1-Month | +6.68% | +5.78% |
3-Month | -31.21% | -30.81% |
6-Month | -18.40% | -17.68% |
Year-to-date | -13.11% | -12.67% |
1-Year | -16.82% | -16.05% |
3-Year | -32.26% | -32.09% |
5-Year | -18.00% | -17.85% |
In the next chart we can see the evolution in the past five years.
Final comment
If we analyze history, gold has been a good diversifier to a stock or bond portfolio, and gold miners look attractively valued relative to gold. So for those investors seeking to invest their money this ETF could be a good option.
Hedge fund gurus have also been active in the company. John Burbank (Trades, Portfolio) and Arnold Schneider (Trades, Portfolio) have taken long positions in the third quarter of 2014.
Disclosure: Omar Venerio holds no position in any stocks or funds mentioned.