VanEck lists global mining ETF on LSE
VanEck Europe has listed the VanEck Vectors Global Mining UCITS ETF (GDIG) on the London Stock Exchange, which is designed to give European investors access to metal and mining industries around the world.
The firm says that the new ETF expands VanEck's offering in Europe and complements in particular the existing product portfolio for commodity ETFs.
The VanEck Vectors Global Mining UCITS ETF tracks performance of the EMIX Global Mining Constrained Weights Index (former Euromoney Global Mining Constrained Weights Index), a rule-based and weighted by market capitalisation index.
The widely index was launched in February 1989, giving it a track record of almost 30 years. The history has shown that many actively managed funds (more than USD6.4 billion AUM) have failed to consistently beat this index and tend to be more expensive than index based funds.
The VanEck Vectors Global Mining UCITS ETF is, the company says, the first ETF to enable global exposure for investors in metal and mining companies from developed and emerging markets.
The index comprises countries such as the UK, Canada, Australia, the USA, Brazil, Mexico, South Africa, Russia and China. The ETF also offers a broadly diversified portfolio of mining companies that extract Gold, Silver, Copper, Nickel, Zinc, Lead, Aluminum, Iron Ore, Thermal Coal, Metallurgical Coal, Cobalt, Lithium etc. The index comprises 160 equities in 24 markets (as of 31 March 2018).
“In a diversified portfolio, commodity companies are a valuable component primarily due to their strong fundamentals and inflation-protecting qualities,” says Dominik Poiger, CFA, Trader/ETF Portfolio Management at VanEck, adding, “The current market environment is beneficial for the metal and mining industry. The global synchronous growth will continue to support demand. Electric vehicles have the potential to be a disruptive force underpinning demand for commodities.”
He further explains that the “ongoing industry-wide restructuring theme and strong fundamental data are precisely what commodities investments need.”
Mining shares in particular have broken their downtrend by means of industry-wide restructuring measures. According to Poiger, the sector is now focussing increasingly on returns on capital, returning free cash flow to shareholders and improved profitability.