The low costs and ease of tradingexchange-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 offer 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), theVanEck Vectors Gold Miners ETF (GDXJ) and thePowerShares 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 Oct. 15, 2018.
Sprott Gold Miners ETF
The Sprott Gold Miners ETF 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. Launchedin 2014, the fund has $131.99 million in net assets. Major holdings include Goldcorp, Inc., Kirkland Lake Gold, and NewmontMining Corp., whicheach hold more than 14% of the portfolio's assets. The fund's expense ratio is 0.57%, and it offers a dividend yield of 0.76%.
VanEck Vectors Gold Miners ETF
The VanEck Vectors Gold Miners ETF, launched by Van Eck in 2006, has approximately $9.08 billion in net assets, 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 Barrick Gold Corp., Newmont Mining Corp., Franco-Nevada Corp., Newcrest Mining Ltd. andGoldcorp. The fund's five-year average annualized return is -5.24%. The fund carries an expense ratio of 0.53% and offers a dividend yield of 0.95%.
iShares MSCI Global Gold Miners ETF
The iShares MSCI Global Gold Miners ETF was launched in 2012 by BlackRock. It has $204.46 million in net assets. This ETF tracks the MSCI ACWI Select Gold Miners Investable Market Index, which follows the performance of companiesin 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 NewcrestMining Ltd., each of which accounts for more than 9% of the portfolio.The three-year average annualized return is 11.29%, and the dividend yield is 0.83%. The iShares MSCI Global Gold Miners ETF offers a low expense ratio of 0.39%.
VanEck Vectors Junior Gold Miners ETF
The VanEck Vectors Gold Miners ETFwas launched by Van Eck in 2009 and has approximately $4.7 billion in net assets. This complementary offering to Van Eck's 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 Anglogold Ashanti Ltd., Northern Star Resources Ltd. and Evolution Mining Ltd.The fund's five-year average annualized return is -6.62%. The expense ratio for the fund is 0.54%, and the dividend yield is 0.04%.
PowerShares Global Gold & Precious Metals ETF
In 2008, Invesco PowerShares launched the PowerShares Global Gold and Precious Metals ETF, which has $23.75 million in total assets. This ETF tracks the NASDAQ OMX Global Gold and Precious Metals Index, which measures the overall performance of approximately 50 global companies that are among the most liquid and widely traded firms engaged in the precious metals mining industry. The fund's portfolio includes a broader exposure to the total precious metals sector than more exclusively gold-focused ETFs. The top three portfolio holdings are Barrick Gold Corp., Newmont Mining Corp. and Franco-Nevada Corp. The fund's expense ratio is 0.75%, its five-year average annualized return is -5.08%, and its dividend yield stands at 2.15%.
