Markets

Gold And Silver ETFs Continues To Shine

Last year it would’ve been hard to imagine the stellar year that the SPDR Gold Trust (GLD) is experiencing in 2016.

Just last December, the physically backed gold fund had seen its assets under management fall to $22 billion from its high in 2011 of $76 billion, as the price of gold tumbled from its high during that same year. But as they say, past performance does not guarantee future results.

So far this year there has been a dramatic reversal of fortune for GLD and other gold ETFs. Not only is the price of gold up nearly 30%, but GLD has seen its AUM nearly double to just under $43 billion, now making it the sixth-largest ETF in the U.S.

And beyond the physically backed gold funds, gold miner ETFs are also attracting major new assets while offering up some of the best ETF performances in the industry, not counting leveraged or inverse funds.

The largest precious metals miner fund, the $10 billion VanEck Vectors Gold Miners ETF (GDX), has doubled in value so far this year, with a 117% return, while its counterpart, the $4 billion VanEck Vectors Junior Gold Miners ETF (GDXJ), has registered a 147% gain for the year.

And Then There’s Silver

While gold catches all the headlines and attention, maybe the unsung star of financial markets so far this year is silver. The metal is up more than 45% this year, carrying with it silver ETFs. The largest physically backed silver, iShares Silver Trust (SLV) is up nearly the same amount as the metal, minus fees and liabilities.

But when it comes to the No. 1 performing ETF of the year, excluding leveraged and inverse funds, the $60 million PureFunds ISE Junior Silver (Small Cap Miners/Explorers) ETF (SILJ) has had a wide lead, with more than 230% appreciation this

The next two top-performing ETFs are also silver miner ETFs, the iShares MSCI Global Silver Miners ETF (SLVP) and the Global X Silver Miners ETF (SIL), are up 168% and 166%, respectively. With global bond yields collapsing and seemingly stalled economic growth throughout the world, these safe-haven ETFs have hardly run their course.

Launches

AdvisorShares launched the actively managed AdvisorShares Cornerstone Small Cap ETF (SCAP), which targets U.S. equities that are smaller than the largest company in the Russell 2000 Index but are not smaller than the bottom-ranked 200 stocks in the index. The fund is subadvised by Cornerstone Investment Partners and comes with an expense ratio of 0.90%.

SCAP generally equal-weights individual securities within sectors, but also seeks to be within 15% of each sector’s weight within the Russell 2000 Index. The fund’s strategy is based on the idea that the market is slow to react to companies with improving fundamentals and that the mispricing can be exploited.

Drew Voros can be reached at dvoros@etf.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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