VanEck Vectors Junior Gold Miners ETF (NYSEARCA:
GDXJ) are set for their quarterly rebalancing on March 19. This upcoming rebalancing event should further reduce the overlap between the two exchange-traded funds.
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RBC analyst Wayne Lam expects the Junior Gold Miners ETF to keep adding companies. He noted that investors have become increasingly focused on the junior end of the GDXJ. Lam believes this means there is an increase in the number of firms that are eligible for inclusion. The GDXJ added almost 30 new junior gold companies last year, including 10 in the fourth quarter.
He also sees an emphasis on gradually reducing the overlap between the GDXJ and the GDX. Lam said the two ETFs overlap by almost 50% in the companies they include and 70% in market capitalization. The market cap overlap has declined from an average of 80% in 2018 and 2019.
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Scoop Up These 4 Top-Rated Gold Stocks Now
KGC – Gold has seen a sharp sell-off following a massive rally since the beginning of the COVID-19 pandemic. The precious metal is expected to return to higher prices as there are still uncertainties surrounding the economic recovery as well as possible inflation. As a result, companies operating in mining and exploration space such as Kinross Gold (KGC), Jaguar Mining (JAGGF), Gold Fields (GFI), and DRDGOLD Limited (DRD) are positioned to see gains.
Feb 23, 2021
Gold investors have been on a roller coaster ride since the onset of the COVID-19 pandemic. It crashed heavily during the initial sell-off and then rebounded sharply to reach record levels. The yellow metal’s price hit an all-time high of $2,070 in August 2020. Thus, gold miners also benefitted.