Gold Miners Monthly Report | June

Gold Miners ETF Monthly Report: Key Takeaways

• Over the past 12 months, the USD has strengthened by 18.8% against SEK and 14.15% against EUR. Strong currency trends have a significant impact on the financial system. The strength in the USD has now begun to reverse slightly since mid-May. As we described earlier, everyone is on the same side of the boat in this "long-USD trade". As always, one day, it will result in an equally strong opposite trend. Perhaps it has already started now that the market has priced in all US interest rate hikes and now wants to position itself before Europe also begins to communicate sharper interest rate hikes. [1]

• The precious metal mining companies continue to show solid cash flows and seem to continue the trend with higher dividends in 2022. In 2021, the average dividends for the companies were 2.24% compared with the companies in the S&P500, where the corresponding dividends were 1.27%. Acquisitions of companies in the sector also show strength. The latest is Gold Fields, which wants to buy Yamana Gold and thus form the world's fourth-largest gold producer. [2] [3]   

• Gold fell -3.1% in USD and -4.8% in EUR during the month. It is worth noting that gold set a new all-time high in EUR as recently as March 2022. Gold has performed well during the 2000s, and the extremely expansive money supply growth speaks for gold for a long time to come. If, on the other hand, you look at the market in the short term, indicators such as COMEX positionings and sector sentiment are important to buy low and sell high.

• Gold prices declined during the month in USD (-2.1%) but increased in EUR (+ 2.8%). It is important to see the price/value change for gold in your currency in the country where you live. Gold set a new all-time high in EUR as recently as last month. [4]

Please note that all performance figures are showing net data. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product.

Macro Outlook

COMEX positionings were negative at the end of March but reversed to positive in April. They were very positive at the end of May as the so-called "commercials" have reduced their short positions to historically low levels. Sentiment in the sector has also fallen to very low levels, making ordinary investors, "retail", sell more and more. Commercials have continued to buy back what was sold. When gold and silver break through more and more moving averages, retail will gradually start buying back again. Consequently, the increasing price will generate more purchases, and the price will rise even more. [5] [6]    

There is significant uncertainty regarding how the broad stock market will be able to shake off and come back from this year's sharp decline. We have not seen any real change in the war in Ukraine, price inflation levels, a halt or pause in interest rate hikes, China's lockdowns or the world's raw material/component deficiencies. At least the situation in China should be resolved soon, which would likely positively affect all markets. [7]

AuAg ESG Gold Mining UCITS ETF (ESGO) Performance Table (As of 31.05.22)

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 31/05/2022. 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 25.03.2022 (cob) and ending on 30.03.2022 (cob). The new composition and target weights will be fully reflected in the index open 31.03.2022:

• New constitutes (green and bold)
• Deletions (red and drawn out)
• Constitutes with over 85% participation from all 29 quarterly rebalances since the index start on 27.03.2015 (dark)
• ESGO, ESG Risk Score – average: 25,31 / highest: 32,28 (Endeavour)
• Universe, ESG Risk Score – average: 38,10 / highest: 65,20 (as of ESGO inception July 2021)

Source of all data: AuAg Funds / Bloomberg / Sustainalytics / Solactive. Data as of 31.04.2022

Learn more about our gold miners ETF.