Do You Need A “Pure” Gold Miners ETF?

As interest in achieving exposure to commodities has increased in recent years, various issuers have introduced exchange-traded products designed to access this potentially attractive asset class. While assets have flowed into exchange-traded products that offer exposure to natural resources prices through futures contracts and physical commodities, ETFs that invest in stocks of the companies engaged in the extraction and production of commodities have also become popular tools. Commodity-intensive equities often exhibit a positive correlation to the spot price of the underlying resource or resources, since the profitability of these firms depends on the prevailing market price for their goods. Because the underlying assets are stocks, this strategy may diminish some of the diversification benefits found when investing directly in commodities or futures contracts. But there are some potential advantages as well; investing in commodity-related equities avoids the thorny issue of contango, and results in the underlying assets having an identifiable [...] Click here to read the original article on ETFdb.com. Related Posts: Precious Metal ETFs: Physical vs. Equity Exposure Inflation-Fighting ETFs Back In Focus Playing Precious Metals Through Equity ETFs Gold Miner ETFs: Breaking Down All The Options Global X Debuts Pure Gold Miners ETF (GGGG), Oil ETF (XOIL)