Gold Miners Monthly Report | March

08 March 2022

Gold Mining ETF Monthly Report: Key Highlights

  • We wrote about the risk of war last month, and now it has arrived. The war in Ukraine overshadows everything else right now. We can only hope for de-escalation and that it does not lead to anything even worse. In addition to all human tragedies, it will have significant effects on the financial system and energy and commodity resources over a long time.
  • Even if someone "wins" in the end and we can return to a normal world, a lot of financial damage has already been made, which will require significantly increased stimulus and indebtedness to cover. It is impossible even to understand the extent of the impact on the financial system.
  • Before the war began, the Fed was offensive in its communication between meetings that interest rates will be raised, and then by 0.5% rather than 0.25% at the next meeting on 15-16 March. It has also been said that many more interest rate hikes will come during the year to stop the rampant and high inflation. This has continued to lead to problems for bonds issued by companies with lower ratings (high-yield/junk bonds) in the United States. The same issues will arise in Europe when the ECB is forced to raise interest rates in the future. [1]
  • In the precious metals market, the companies that reported in February have shown very strong results and increased dividends. [2] It is primarily the higher average prices of the raw materials that contribute. This is the beginning of a trend of higher dividends, share repurchases, and company acquisitions in a sector that has been undervalued for a long time.


Macro Outlook

  • FED and other central banks are now in a difficult situation. They must start raising interest rates so that inflation does not pick up speed even more, and at the same time, the timing couldn't be worse. Tightening right now when so much stimulus will be needed to counteract all the negative consequences of the war in Ukraine will be a tough challenge. A lot is at stake now.
  • After the gains on precious metals in February, the positioning on COMEX is now somewhat bearish regarding gold but still bullish when it comes to silver. During the month, gold set new all-time highs in several currencies such as EUR, YEN and SEK.  With the current uncertainty in the financial system, the problems with commodity deliveries and the cost of financing everything that must be done now, we see an increased price picture for raw materials and tangible assets going forward.
  • Gold and silver are still historically cheap in relation to the S&P 500. The companies that extract the metals are also undervalued in relation to the metals themselves, which provides an interesting investment opportunity.


Gold Mining ETF Performance (As of 28.02.22)















Solactive AuAg ESG Gold Mining Index







Performance before inception is based on back-tested data. Backtesting is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such a strategy would have been. Back-tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product.
Source: Bloomberg / HANetf. Data as of 28/02/2022. Please note that all performance figures show net data.


Composition / Holdings

In the ordinary rebalance, the new composition will be implemented over a period starting on 04.01.2022 (cob) and ending on 07.01.2022 (cob). The new composition and target weights will be fully reflected in the index open 10.01.2022:

  • New constitutes (green and bold)
  • Deletions (red and drawn out)
  • Constitutes with over 85% participation from all 28 quarterly rebalances since the start of the index (dark)
  • ESGO, ESG Risk Score – average: 25,39 / highest: 32,28 (Endeavour)
  • Universe, ESG Risk Score – average: 38,10 / highest: 65,20 (as of ESGO inception July 2021)
  • Index value as of 28.02.2022: 2368,85 / +136,88% (index start date 27.03.2015, at 1000)

Source of all data: AuAg Funds / Bloomberg / Sustainalytics / Solactive. Data as of 28.02.2022.


Weighting & Rebalancing

On each selection day, each index component is assigned an equal weight. The index is rebalanced quarterly with a four-day Asian rebalancing.


SFDR & ESG Risk Rating Methodology

The ETF is classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR). The ESG Risk data is provided by Sustainalytics and is active, external, and independent.

The ESG Risk Ratings measure the degree to which a company’s economic value is at risk driven by ESG factors or, more technically speaking, the magnitude of a company’s unmanaged ESG risks. To calculate the ESG risk rating of each company, the Data Provider considers the corporate governance and material ESG issues.

Corporate governance is a foundational element in the ESG Risk Ratings and reflects our conviction that poor Corporate Governance poses material risks for companies. Corporate governance is based on six pillars and 15 indicator weights. Material ESG Issues (MEIs) contribute to the ESG risk rating. A company can have up to ten pre-selected, industry-specific MEIs plus any additional company-specific issues.


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