The S&P/ASX 200 Index (ASX: XJO) has had a pretty decent week so far, bar today's miserly performance. Since the end of last week's trading, the ASX 200 has gained a healthy 1% or so. So it may be surprising to find out that one ASX exchange-traded fund (ETF) has risen by a whopping 13% over the same period. That ETF is none other than the VanEck Gold Miners ETF (ASX: GDX).
This ETF from provider VanEck does what it suggests on the tin: invests in a portfolio of gold mining shares.
But not just ASX gold miners. Sure, you will find Newcrest Mining Ltd (ASX: NCM), Northern Star Resources Ltd (ASX: NST), and some other ASX peers. But this fund holds gold miners from all around the world. More than 50% of its weighted portfolio is actually held in Canadian miners.
A further 20% hail from the United States. As such, it is other names like Newmont Corp, Barrick Gold, and Wheaton Precious Metals that dominate the VanEck Gold Miners ETF"s portfolio.
Overall, this ETF has 49 underlying holdings within it.
So why has the VanEck Gold Miners ETF had such a cracking week?
Why has the Vaneck Gold Miners ETF soared 13% this week?
Well, for an ETF to rise like this, its underlying companies usually have to be rising in value as well. And lo and behold, we see that Newmont, the fund's largest holding, is up by 5.7% over the week so far. Barrick Gold is up around 8%, a similar amount to Evolution Mining Ltd (ASX: EVN). This is largely thanks to the price of gold itself appreciating over this period.
Further, since most of the VanEck Gold Miners ETF's holdings are domiciled outside Australia, the value of the fund is also influenced by currency movements. Over the past week, we have also seen the Australian dollar drop against the US dollar. This would boost the returns of this ETF even further. That's because most of the companies are priced in non-Australian dollar terms.
So all of these factors probably explain why the VanEck Gold Miners ETF has had such a stellar run this week. But despite this, the ETF remains down by around 5.6% this year to date.
