Junior Gold Miners ETF
First I have to explain what exactly is a junior gold mine. You can split this in 3 sorts of companies. The first category are companies that are looking for investors to back them in their search for gold.
The second category are companies that have found the gold but they do not have an operational gold mine yet. The third category are gold mines that just started mining gold.
It goes without any question that this junior gold miners ETF is a very speculative one indeed. Many of the companies included must first try to find the gold let alone making a profitable exploitation from it.
Just like always investments go before returns and here it is clearly the case. But also the gold price itself plays a major role.
When the gold price is low the chances that all these investments will result in a profitable exploitation are minor but with a high price of gold finding new gold mines becomes a very interesting quest as simultaneously an exploitation will be profitable sooner and much easier.
The major consequence is that a Junior Gold Miners ETF is almost worth nothing when gold prices are declining or are at extreme low levels. But with a rising gold price the price of this junior gold miners ETF may go five-fold or more.
VanEck Vectors Junior Gold Miners ETF
Within this junior gold miners ETF you will find about 55 companies which is needed for reasonable spread. Most companies originate from Canada with a weighing of 60%. Australia comes in second with a 15% share and the Us is third with 10%.
I myself love to invest in this junior gold miners ETF as prices can go up very speedily. Getting in and out in short periods of time may result in taking 5% to 10% returns. When the gold price is too high I will shun this junior gold miners ETF as the downward risk is too high.
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VanEck Vectors Junior Gold Miners ETF info:
ETF provider: VanEck Vectors (Van Eck Global)
Exchange: NYSE Arca