3 ASX ETFs for exposure to precious metal stocks

In an environment marked by inflation concerns, geopolitical uncertainty and volatile equity markets, precious metals continue to play an important role in the portfolio construction. 

Instead of directly buying physical metals or individual mining stocks, investors can gain the diversified and liquid exposure through the following three ASX listed ETFs.

Global X Silver Miners ETF (ASX: SLVM) 

provides targeted exposure to global silver mining companies, offering investors leveraged participation in movements in the silver price. The ETF tracks Solactive Global Silver Miners Net Total Return AUD Index and includes 39 silver focused miners across the developed and emerging markets excluding China, India and Taiwan. 

Silver miners can benefit from operating leverage, as rising silver prices typically improve margins, cash flows and project viability. The investment case is supported by silver’s structural supply deficit since 2021 and growing industrial demand from solar panels, grid expansion and semiconductor manufacturing. 

The country exposure is led by Canada at around 60% followed by United States and Mexico. The major holdings include Wheaton Precious Metals, Pan American Silver and Coeur Mining. 

SLVM has management fee and cost of 0.65% per annum and offers investors diversified exposure to silver miners through the single ASX listed vehicle.

VanEck Gold Miners ETF (ASX: GDX) 

offers exposure to the diversified portfolio of large and mid-sized global gold mining companies. The earnings are closely linked to gold price. The ETF tracks NYSE Arca Gold Miners Index (AUD) and holds 92 companies across the key gold producing regions including Canada, the United States, Australia and South Africa. 

The gold miners have historically benefited during the period of market stress and inflation making the sector useful for portfolio risk management. Top holdings include Newmont Corp, Agnico Eagle Mines, Barrick Mining and Wheaton Precious Metals providing access to the established producers with global operations. 

GDX has been listed since 2015 and manages net assets of approximately $1.6 billion reflecting its scale and liquidity. The fund charges management fee of 0.53% per annum and provides investors with broad gold mining exposure through one ASX trade.

Betashares Gold Bullion Currency Hedged ETF (ASX: QAU)

is designed for the investors seeking direct exposure to the price of gold without taking on AUD/USD currency risk. The ETF is backed by physical gold bullion. It is held in secure London vaults and aim to track the price of gold hedged into Australian dollars. 

Unlike gold mining ETFs, QAU provides pure gold price exposure without operational or company specific risks. Gold is widely regarded as safe haven asset and has historically performed well during periods of economic uncertainty and financial market volatility. 

The currency hedged structure reduces the impact of exchange rate movements on returns, making performance more closely aligned with gold prices. 

QAU has a management fee of 0.49% per annum with additional expenses of 0.10% and offers simple and efficient way to add gold exposure to an Australian portfolio.

(Source: Company Announcements)