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The low costs and ease of trading exchange-traded funds (ETFs) have made them increasingly attractive to investors, and there are gold ETFs available that offer a variety of exposures to the gold market. However, only a handful of the available gold ETFs offers the bonus of paying dividends: the Sprott Gold Miners ETF (SGDM), the VanEck Vectors Gold Miners ETF (GDX), the iShares MSCI Global Gold Miners ETF (RING), the VanEck Vectors Gold Miners ETF (GDXJ) and the PowerShares Global Gold and Precious Metals ETF (PSAU).
Gold ETFs that hold the physical precious metal or that hold gold futures contracts do not offer dividend yields. Dividends are only available with equity-based gold ETFs that invest in the stocks of companies engaged in the gold industry. ETFs that pay dividends offer some risk protection, especially in volatile markets, and they also offer investors income while holding investments over a long period of time.
All information here was current as of Nov. 15, 2021.
1. Sprott Gold Miners ETF
The Sprott Gold Miners ETF (SGDM) holds a portfolio of 25-plus gold and silver mining stocks and is designed to mirror the performance of the Sprott Zacks Gold Miners Index. The underlying index contains gold and silver stocks traded on U.S. exchanges, divided into three tiers based on revenue growth and debt-to-equity (D/E) ratios.
Launched in 2014, the fund has $246 million in net assets as of November 2021. Major holdings include Newmont Mining Corp., Franco-Nevada Corp., and Barrick Gold, which together make up more than one-quarter of the fund’s total assets. The fund’s expense ratio is 0.50%, and it offers a dividend yield of 0.32%.
2. VanEck Vectors Gold Miners ETF
The VanEck Vectors Gold Miners ETF (GDX), launched by Van Eck in 2006, has approximately $14.5 billion in net assets as of November 2021, making it one of the largest and most widely traded gold ETFs. It is typically at least 80% invested in the stocks that comprise the NYSE Arca Gold Miners Index, which tracks the overall performance of companies involved in the gold mining industry.
Major holdings include Newmont Mining Corp., Barrick Gold Corp., and Franco-Nevada Corp., which together make up around one-third of the fund’s total holdings. The fund carries an expense ratio of 0.52% and offers a dividend yield of 0.55%.
3. iShares MSCI Global Gold Miners ETF
The iShares MSCI Global Gold Miners ETF (RING) was launched in 2012 by BlackRock. As of November 2021, it has $530 million in net assets. This ETF tracks the MSCI ACWI Select Gold Miners Investable Market Index, which follows the performance of companies in both developed and emerging market economies whose primary revenue source is gold mining.
The three top portfolio holdings are Newmont Mining Corp., Barrick Gold Corp, and Wheaton Precious Metals Corp., together accounting for more than 42.5% of the portfolio. It has a dividend yield is 1.62%. The iShares MSCI Global Gold Miners ETF offers a low expense ratio of 0.39%.
4. VanEck Vectors Junior Gold Miners ETF
The VanEck Vectors Gold Miners ETF (GDXJ) was launched by Van Eck in 2009 and has approximately $5 billion in net assets as of November 2021. This complementary offering to Van Eck’s larger GDX ETF offers exposure to gold mining firms with lower market capitalization values. It aims to mirror the Market Vectors Global Junior Gold Miners Index, which was designed to reflect the performance of small- and mid-cap companies that derive the majority of their revenue from gold and silver mining.
Major portfolio holdings include Pan-American Silver, Evolution Mining Ltd., and Endeavour Mining Plc. Unlike the larger funds, the concentration of the portfolio is much more diversified, with the top 10 holdings only making up 36.3% of the portfolio’s assets. The expense ratio for the fund is 0.53%, and the dividend yield is 2.00%.
