Van Eck Global has unveiled an ETF providing access to small and mid-cap global gold mining companies on NYSE Arca.
The Market Vectors Junior Gold Miners ETF offers exposure to junior mining companies, many of which are actively engaged in developing new sources of gold.
The fund tracks the Market Vectors Junior Gold Miners index, comprising a global universe of publicly traded small and mid-capitalisation companies that generate at least 50% of their revenues from gold or silver mining.
The weighted average market capitalisation of the index's constituents was $850m as of September 30, according to Van Eck. At the same date, the top six countries by weighting were Canada (62.6%), the US (21.8%), Australia (11.2%), South Africa (2.4%) China (1.3%) and the UK (0.7%).
Van Eck's International Investors Gold fund manager Joe Foster says gold offers an alternative to paper currency and is a hedge against inflation, both of which are key themes driving the gold market.
He says: "While there have been no onerous levels of inflation so far in this gold cycle, firming commodities prices and the liquidity being created by monetary policies could eventually bring much higher levels of inflation."
The issuer highlights there are several risks associated with investing in these early-stage companies. It says many junior miners operated at a loss in 2008 and are particularly vulnerable to changes in the price of gold.
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