TSX/TSXv Gold and Silver Producers in Gold ETFs

Combined ranking, our newest feature, provides investors with a unique way of looking at both gold ETFs and the TSX/TSXv gold and silver producers they hold.

Market Vectors Gold Miners ETF (GDX).

have at least 33% of total holdings in TSX/TSXv gold and silver producers.

Mouseover a fund name on either chart below to view a combined ranking of each fund.

The combined ranking is a weighted average based on fundamental data and market prices for each individual TSX/TSXv producer in the fund according to the percentage of total holdings it represents. It is a ranking based on benefit and cost metrics derived from each producer’s reserve plus resource disclosures, quarterly financial results, quarterly metal production counts, fully diluted share estimates (including in the money options and warrants) as well as stock price and spot metals prices.

The chart below shows the ETF benefit metrics ( ore value. margin. consistency. and npv ) and the cost metrics ( sp/pv/fds and ev/oz ) considered for the three ETFs.

For more on benefit and cost metrics used to create rankings, see GoldMinerPulse Rankings.

View a comparison of the most recent prices for the same three ETFs and the AMEX Gold Bugs Index (HUI) on Yahoo Finance.

If we extend Yahoo’s timeline to a one-year window, such as 2013 when gold prices were dropping, we see that GDXJ had the poorest price appreciation while the GDX with more dividend-paying stocks did better.

The price performance difference between GDXJ and GDX may be partly explained by the fact that GDX holds many dividend-paying stocks while GDXJ contains only a few. If so, it means the market is willing pay more for the same or fewer benefits to get a dividend.

The price performance difference between GDXJ and ZJG, on the other hand, may be partly explained by the fact that ZJG has a higher percentage of TSX/TSXv gold and silver producers, which typically have cash flow making them more attractive when the price of gold is falling.

The ratio of TSX/TSXv gold and silver producers to each ETF’s total holdings on 29 October 2013 was:

ZJG: 73.4%.

GDX: 63.5%

GDXJ: 46.1%

Our combined ranking calculations seem to support the view that in a falling market, dividend-paying stocks and stocks with strong cash flows will probably outperform on a relative basis to non dividend paying and non producer holdings. Throughout 2013, ZJG and GDX have been the better performers in terms of price appreciation. They are also the funds with the highest percentage total holdings in TSX/TSXv gold and silver producers.

Click on the Equally Weighted Groups to view a ranking of various groupings of TSX/TSXv gold and silver producers where each producer where the metrics of each company in the group is assigned a weighting factor of 1.