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While many investors have felt the volatility so far this year across Australian and international markets, this gold miner ETF has charged ahead.
Gold is a commodity that trades based on supply and demand. The interplay between supply and demand ultimately determines the spot price of gold at any given time.
Investors can get their hands on gold through physical assets like jewellery or gold bullions or coins.
However another option is to invest in gold mining companies, or ETFs tracking the commodity price.
Why has gold risen so much this year?
At the time of writing, Gold is trading at US$3,223.68. This represents more than a 20% rise in the last 6 months.
For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.37% during that span and the S&P 500 Index (SP: .INX) has risen just 0.38%.
It’s no surprise gold has done well lately, as historically it has been perceived as a safe haven during uncertain times.
Geopolitical uncertainty, tariff policies and persistently high inflation, has allowed gold to outperform other asset classes.
Naturally, the volatile last 6 months has motivated investors to turn to the commodity.
In fact, last month gold overtook the Magnificent 7 in terms of trade volume.
So how do investors jump on board this runaway train? One option is a Gold focussed Exchange Traded Fund.
BetaShares Global Gold Miners ETF – Currency Hedged (ASX: MNRS)
The fund aims to track the performance of the largest global gold mining companies (ex-Australia), hedged into Australian dollars.
Currency hedged ETFs are designed to protect Australian investors from exchange rate fluctuations between the Australian dollar and the foreign currency of the underlying investments.
At the time of writing it includes 47 companies with its largest country allocation being to:
- Canada: 47.8%
- United States: 13.7%
- South Africa: 10.9%
Importantly, it excludes Australian gold mining companies.
This could make it ideal for investors who already have exposure to gold mining companies here in Australia. It could also provide value if you are looking to diversify across the largest holdings internationally.
So far this year it has already risen 31.19%.
One concern for prospective investors is that its too late to get on board with gold miners focussed investments.
However, many forecasters believe gold has more to run.
Goldman Sachs predicts that the yellow metal will surpass US$4,000 in mid-next year.
