Producer Equities Outpace Gold Prices in Betashares Global Gold Miners Currency Hedged ETF

Australian access to a basket of internationally listed gold producers is provided by Betashares Global Gold Miners Currency Hedged ETF (ASX:MNRS), which has stayed prominent in local exchange traded fund discussion after a period in which producer equities substantially outpaced the metal itself.

The effect on earnings from changes in commodity prices is amplified for mining companies due to their largely fixed cost structures. When realised prices fall, margins compress rapidly and producers operating at higher cost positions can move from comfortable profitability to marginal economics quickly.

A globally constructed gold producer basket is dominated by North American listed companies, with operations spread across Canada, the United States, Latin America, West Africa and Australia. Weighting typically follows market value, so a handful of the largest producers account for a substantial share of the basket.