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General Precious Metals
'Curse of Success' Leads the Most Popular Mining ETF to Widen Its Holdings
The world’s second-largest exchange-traded fund linked to material producers has become the victim of its own success.
With investors piling in amid a precious-metals recovery, VanEck Vectors Junior Gold Miners ETF’s assets jumped 60 percent to $5.54 billion this year. That created a dilemma for the fund that tracks the MVIS Junior Gold Miners Index, as its holdings surge above 10 percent of some of the companies it owns.
On Thursday, MVIS Index Solutions, a VanEck company, announced changes to its equity indexes, widening the criteria for inclusion into the gauge that is tracked by VanEck’s junior gold miner ETF.
“This is the curse of success,” said Sameer Samana, a St. Louis-based global quantitative strategist at Wells Fargo Investment Institute, which oversees $1.8 trillion. “They’re starting to run into issues of how much they own in certain names, how many names qualify for the index and they’re running into issues of how big the fund has gotten.”