VanEck vs Sprott: Which Gold Miners ETF is Best for Investors

Investors seeking exposure to gold's historic rally can consider two popular ETFs: VanEck Gold Miners ETF (GDX) and Sprott Gold Miners ETF (SGDM). Both track the performance of gold mining companies, but they have different geographic mandates and cost structures. The VanEck fund is more expensive with a 0.51% expense ratio compared to SGDM's 0.46%. However, the Sprott fund provides a higher trailing distribution payout.

The VanEck Gold Miners ETF tracks the MarketVector Global Gold Miners Index and holds 59 securities, while the Sprott Gold Miners ETF targets gold producers in the US and Canada with 48 holdings. Over the past year, both funds have returned around 70-72%, but their beta measures indicate that SGDM is less volatile than GDX.

Historically, VanEck's fund has outperformed Sprott's over the 3-, 5-, and 10-year periods, with annualized returns of 34.8%, 17.9%, and 10.4% respectively. However, it's essential to note that SGDM owns foreign listings of stocks in its portfolio, which may lead to foreign exchange headwinds.

Gold has more than doubled since the start of 2024, driven by investors seeking inflation-hedging characteristics. Both ETFs offer a way to gain exposure to gold without buying physical commodities, and they track closely with the price movement of gold mining stocks.