Amid low interest rates, higher commodities prices, and a soaring Consumer Price Index (CPI), gold and gold miners are disappointing investors this year. However, plenty of market observers are wagering that this scenario won't seep into 2022. With the optimistic outlook for gold in the new year, and with gold miners not having enough WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN) investors, it is a focus for tactical investors ahead of the new year. GDMN made its debut last week.
While gold itself has an impressive track record in various market conditions, miners are a different story. The group tends to exaggerate bullion and has subjected investors to volatility and lagging returns for two decades. That could signal benefits with GDMN's active approach over standard index-based strategies in this category.
A source of allure with gold miners is the fact that the group worked past years of dubious consolidation and ill-fated capital spending and is now home to some of the firmest balance sheets in the materials and mining industry. As WisdomTree Global Chief Investment Officer Jeremy Schwartz notes, profitability among gold miners is improving and dividend sustainability and growth look healthy.
For its part, GDMN offers perhaps the most unique strategy in the gold miners ETF category. The fund not only has access to mining stocks, it also allocates to gold futures, which have the potential to add diversification and reduce volatility.
GDMN lives up to the "efficient" in its name by providing exposure to two assets under one umbrella, meaning that investors don't have to incur the capital outlay.
The ETF holds 55 stocks with weights ranging from 0.18% to 13.95%.