Sunday, May 07, 2006

Van Eck Seeks SEC Approval for Gold Shares ETF

In the wake of the resounding success of gold bullion-backed ETFs, New York-based Van Eck Associates has filed a registration statement with the SEC for approval of the first U.S. ETF that would focus on gold and silver mining company stocks.

According to documents recently filed with the SEC, the objective of the Market Vectors ETF Trust is "to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners Index."

The Gold Miners Index (GDM) only invests in companies with a capitalization greater than $100 million that have traded on an average daily volume of at least 50,000 shares over the past six months. The index includes 43 gold and silver companies. Among the companies listed on the GDM are major gold producers, such as AngloGold Ashanti Barrick, Freeport McMoRan, Gold Fields, Goldcorp, and Newmont. Among the junior gold miners, explorationists, and royalty companies on the GDM are Eldorado Gold, Meridian Gold, Randgold Resources, Crystallex,, Northern Orion, and Royal Gold. Silver miners and explorationists on the index include Apex Silver, Coeur d'Alene Mines, Hecla, Pan American Silver, and Silver Standard Resources.

Van Eck Associates has already experienced success in its Global Hard Assets Fund (GHAAX), which invested in energy and metals, and its International Investors Gold Fund (INIVX). Both funds are garnering high ratings from the Morningstar investment research firm.

Van Eck proposes to charge a total net annual fund operating expense of 0.55% for the Market Vectors ETF Trust. One of the major differences between investing in shares and holding gold bullion is taxes. Precious metals are classified as a "collectible," and are subject to higher taxes. However, mining shares tend to be more volatile than physical metal because of the higher risks associated with actually mining the ore. source

Amex Gold Miners Index (GDM) chart

Amex Gold Miners Index (GDM) chart

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Anonymous BlueDaze said...

This is good news.

I recall TSE also has a goldminers ETF - XGD.

Given that US dollar decline seems a likely long-term trend, it would seem better to invest in XGD so as to benefit both from the gold bull and rising loonie.

Monday, May 08, 2006 9:28:00 AM  
Blogger real1 said...

Yes - XGD Canadian gold miners, I'm not so sure the USD will be down and if it will be down against Canada $. We will seeā€¦.

Tuesday, May 09, 2006 5:47:00 AM  

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