As far as value goes, the VanEck Vectors Gold Miners ETF (TSX:GDX) has been among my top picks for some time, for good reason.
This ETF remains undervalued despite a rising price of gold and the possibility we could see $2,000+ U.S. gold on the horizon should stimulus pick up. In this article, I’m going to discuss what I see as the key fundamental driver that could take this ETF much higher long-term
Perhaps the most important metric investors ought to consider with this ETF, or any gold miner for that matter, is the relative comparison of gold mining equities and gold bullion over time. These asset classes have diverged, and on a relative basis, gold miners are now trading at a 30-year low compared to spot prices of gold bullion, a tremendously cheap level. If there’s a sector to jump up and down and scream about, gold seems to be it.
Finding such an obviously undervalued asset class on a long-term historical and relative basis is rare, and this ETF is indeed one of the best ways to paly the gold mining space give the highly diversified level of exposure provided by this fund as well as the very reasonable management-expense ratio (MER) charged. This ETF is one of my top value picks for fundamentals-focused, conservative long-term investors today.
Invest wisely, my friends.
