Harvest Portfolios has launched the Harvest Global Gold Giants Index ETF (HGGG CN) on the Toronto Stock Exchange, providing exposure to large-cap gold mining stocks from issuers globally.
Michael Kovacs, President and CEO of Harvest Portfolios.
The fund is linked to the Solactive Global Gold Giants Index which consists of the 20 largest gold mining companies listed in North America, Australia, or developed European countries.
Constituents must have a market capitalization of at least CAD 200 million and an average daily traded value of at least CAD 1m over the past one and six months to be eligible for selection.
Constituents are equally weighted within the index which is reconstituted and rebalanced on a quarterly schedule.
According to Harvest, the defensive-focused ETF is aimed at advisors and investors who are concerned that the US economy may be in the late stage of its cycle and that the US dollar may weaken.
Michael Kovacs, President and CEO of Harvest Portfolios, commented, “As we move into late innings in a strong US economy and hot US growth, opportunities may arise to be more defensive in one’s investment portfolio. We have been watching the gold market for some time, especially gold market shares. They have been in a bear market since 2012 which is why we see considerable value in them now.”
Kovacs continued, “HGGG will invest in the largest global gold producers to benefit from margin expansion as gold prices increase. We believe these companies are profitable at current gold prices and have positive earnings and price correlation as the metal rises in value. HGGG allows an investor to diversify across top industry names and reduce single-stock risk that has become more evident in recent markets.”
The ETF trades in Canadian dollars and comes with a management expense ratio (MER) of 0.40%.
The fund will compete with similar products from BMO Global Asset Management Canada and BlackRock Canada.
The BMO Equal Weight Global Gold Index ETF (ZGD CN) also tracks a Solactive index which contains 32 constituents that are equally weighted at each quarterly rebalance. The fund has CAD 85m in AUM and comes with an MER of 0.61%.
Alternatively, the market cap-weighted iShares S&P/TSX Global Gold Index ETF (XGD CN) also offers global exposure to gold miners, although nearly 90% of the fund’s exposure is allocated to North American firms. The fund is the largest in its category in Canada with AUM of CAD 750m and also comes with an MER of 0.61%.