After a multi-year rally, driven by a bull run in gold prices, gold mining stocks came under significant pressure in 2013 and 2014. As the rally in gold faded, miners faced significant margin pressure. Several miners responded by bringing down their costs and selling non-core assets. This has positioned mining companies well for a low price environment. The rally in gold prices since the start of this year though has come as a significant boost for miners. Here are two ETFs that Canadian investors can use to gain exposure to gold mining companies.
BMO Junior Gold Index ETF (TSX: ZJG)
The fund invests in and holds the constituent securities in the same proportion as they are reflected in the Dow Jones North America Select Junior Gold Index. ZJG has had an excellent run so far this year as gold prices have rebounded sharply. Year-to-date, the ETF is up more than 35%.
Horizon’s Enhanced Income Gold Producers (ETF) (TSX: HEP)
The fund provides exposure to the performance of an equal weighted portfolio of North American-based gold mining and exploration companies. Year-to-date, HEP has gained more than 33%. The ETF also offers a yield of 6.04%.
