This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

New Gold Miner ETF Shines

Stocks in this article: GDX GLD IAU

NEW YORK ( TheStreet) -- Market Vectors hopes the launch of the "junior" miners fund later this year will help draw attention to small- and mid-cap mining firms in the same way that the hugely popular Market Vectors Gold Miners ETF (GDX) helped to draw attention to larger-cap miners.

The prospectus for the fund, which was filed on May 29, 2009, was recently amended to include a new list of fund components. The underlying Market Vectors Junior Gold Miners Index tracks stocks and depository receipts of domestic and foreign companies in gold and silver mining.

As gold prices soar to new highs in the U.S., physically backed ETFs like SPDR Gold Shares (GLD) and iShares Comex Gold (IAU) and equity-backed GLD have seen tremendous inflows. According to data from the National Stock Exchange, GLD had the highest net inflows of any U.S. ETF during the month of September.

ETFs are excellent vehicles to gain exposure to small companies while minimizing security specific risk, but even well balanced ETFs can be volatile. The top two holdings in the Junior Miners ETF Index, Silver Standard Resources (SRRI) and Coeur d'Alene Mines (CDE - Get Report), have market caps of $1.55 billion and $1.7 billion, respectively. Small- and mid-cap stocks tend to be more volatile than their large cap peers, so it is likely that the new Junior Miners fund will be more volatile than veteran GDX.

Of course, the fortunes of gold miners are inextricably linked to the trajectory of gold prices. In that sense, the fund offers a not-so-indirect play on gold. Buying this fund gives you exposure that exhibits significantly greater leverage to gold prices than buying the commodity directly. Keep in mind, however, that leverage can cut both ways. If gold prices fail to rise, or if the cost of mining outpaces the rise of bullion prices, these companies will suffer.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs