# Any Miningh Experts Here ?



## fatcat (Nov 11, 2009)

*Any Mining Experts Here ?*

trying to compare BMO ETF *ZMT* to Claymore ETF *CMW* ..

zmt is equal weighted base metals and the claymore is by market size

there is a lot of overlap, almost all of the zmt are in the cmw but in much smaller weightings

the zmt gives you much smaller holdings of the heavyweights

want to have some exposure to mining but not sure which way to go

any opinions from those familiar with either of these ?


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## mogul777 (Jun 2, 2009)

ZMT would be the better choice simply based on fund composition. That answers your question, but you still need to investigate these funds in depth before choosing to actually invest in one. You need to find the reasons to obtain my answer, and be aware of the multitude of pitfalls associated with each investment option.

Disclaimer: I answered this based solely on information you posted. I have spent exactly zero time investigating your investment considerations.


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## dogcom (May 23, 2009)

You may also consider volume. And it looks like CMW has a much higher volume then ZMT making it easier to get in and out of the ETF.


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## furgy (Apr 20, 2009)

Again , without doing any real research myself , just going by Google charts , CMW has a history of paying dividends , so they may do so again , I didn't see any dividends in ZMT.

I think a good mining ETF should pay out some of the dividends they receive , I basically buy only income producing investments these days.


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## fatcat (Nov 11, 2009)

right, cmw is more established and has better trading volume so would be easier to buy and sell

i am wanting some exposure to this sector because like every schmuck i am think "golly, i better have some commodities", certainly if the we see this currency debasement continue worldwide they would be a good stocks to have as a hedge against inflation

cmw seems to give you more of the big buys which means it's somewhat more established but zmt gives a bit more upside because you have more juniors i guess

i am thinking maybe i will split and buy a little of each as i have done with xdv and cdz

all of these are stocks that i plan to hold, not trade


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## andrewf (Mar 1, 2010)

"i am thinking maybe i will split and buy a little of each as i have done with xdv and cdz"

I don't understand this at all. What's your rationale, if you don't mind me asking?


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## the-royal-mail (Dec 11, 2009)

What the heck is Miningh?


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## fatcat (Nov 11, 2009)

i have seen many commentators recommend that if you can't choose between cdz and xdv to just buy both which gives you exposure to both parts of the spectrum consistent payers and dividend increasers

the situation with cmw and zmt seems similar, you have large companies dominating a huge part of one etf and on the other you have an equal weighted set of companies, one gives you more exposure to smaller companies the other gives more exposure to the big guys

if all am incurring is the transaction cost to buy both, then an equal purchase gives me a broad based holdings in that sector

how do you see it ?



> What the heck is Miningh?


a misspelling by a tired poster


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## the-royal-mail (Dec 11, 2009)

fatcat said:


> a misspelling by a tired poster


Can you please edit the title to something more meaningful? I had no idea this thread was about ETFs. You may be missing other replies from people who are dismissing the thread.


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## andrewf (Mar 1, 2010)

fatcat: Their holdings and strategy are so similar that it doesn't seem like it would make a lot of sense to hold both. It's fine if you want to, but it sounds like the other person who has 5 bond funds. More funds does not necessarily deliver better diversification.


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## humble_pie (Jun 7, 2009)

oayrlh it's a fdah to wetrih like dey is portin dere ballbase pacsh wackabrds.


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## fatcat (Nov 11, 2009)

man, i hate it when i ask people for help and no one answers so i am forced to actually do my own research instead of letting others do it for me 

ok *zmt* is a base metal etf (iron, nickel, lead and zinc, copper) which means it excludes precious metals and thus you don't see gold or silver miners on there to any real degree (i believe there is a lot of crossover in mining in so far as miners will bring out whatever is in front of them even if it isn't what they are looking for) so you will not get exposure to the precious metals in zmt, just the boring old base metals

*cmw* is much more broad based index with 165 companies vs. 52 for zmt, there is a lot of overlap obviously and it has a lot of gold and silver miners in it who are represented at the very top of the index (barrick, goldcorp and newmont for example)

over 52% of cmw is not even represented in zmt consisting mainly of gold producers and a lot of billiton

market cap is similar (though zmt is only a little over a year old vs cmw 2.5 years) but zmt has almost twice the daily trading volume

so you could certainly own equal weights of each which give large market cap miners like billiton and big gold producers and then zmt would give you equal weighting of many different base metal producers .... zmt keeps you away from gold and silver but into copper

on their own they look like very different products


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## Belguy (May 24, 2010)

You won't find either of these ETF's in any classic 'Couch Potato' model portfolios. That is because it is recommended that you only hold broad-based ETF's like XIU etc.

That said, I do hold a 5 percent position in the RBC Global Precious Metals Fund and so who am I to say?!

Generally, the broader-based the investment, the more diversification and less volatility you end up with.

Of the choices given, my recommendation would be CMW but nobody knows where gold is headed and, when it corrects, it could be quite significant and so the volatility factor comes into play again.

You pays your money and you takes your chances.


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## fatcat (Nov 11, 2009)

> That is because it is recommended that you only hold broad-based ETF's like XIU etc.


 right, i guess it depends on who the "it" is .... 

i am in the camp that believes that at least for the moment, we are in an "all the old rules don't apply" situation

i wouldn't load up on the metals by any means but it seems clear that if we see a large amount of worldwide QE (like the japanese just did and the us is going to do) then mining and metals stocks will absolutely benefit

cmw is broad based but if you want to get into base metals zmt could arguably be even more broad based since it gives an equal shot at many players


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## humble_pie (Jun 7, 2009)

cat you have a good idea & what's more you seem able although reluctant to do your own research, so these aspects merit reward.

on the negative side & just ottomh it's a bit late for you to be arriving at the mining banquet. The first sitting has already departed & the waiters are changing the place settings for the second sitting, which you could join, although the exact hour of its commencment isn't clear yet. The long perspective is that it's going to be an all-night-all-day affair at the banquet, though. Fortunately the kitchens are loaded.

it's never a good idea to rely on a fund's advertising imho. Or a banquet's. You have to study the individual items on the menu. Like, a quick glance shows that bmo's base metals etf holds a significant exposure to gold & silver in spite of what their advertisers are saying. Take ivanhoe, their biggest holding. Its main claim to fame is the giant Oyu Tolgoi property in mongolia. This is copper/gold, but it's the gold that's garnered all the attention for more than a decade. IVN will gradually withdraw from mongolia in favour of its partner rio tinto; but at the present moment i'd class ivn as a gold producer, not a base metal producer.

mercator, too, (another bmo top holding) has a 100% gold and silver play in chihuahua mexico.

as a matter of fact, copper itself should never be classed among the base metals imho. It's a semi-precious. Known as doctor copper because it's an economic bell-wether, this beautiful gleaming red-gold metal forms a class of its own.

more trivia. Took a quick look at the claymore fund's holdings. Now that's a sensible, well-rounded diversified list that's suitable for a startup investor imho. Some good picks in there. Personally i'd choose this one alone, i would not buy the bmo item.


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## HaroldCrump (Jun 10, 2009)

Belguy said:


> Generally, the broader-based the investment, the more diversification and less volatility


....and less returns.


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## fatcat (Nov 11, 2009)

pie, thanks for that clarification, i got my definition from wikipedia and have included the whole entry below as it is interesting ... copper seems to be a kind of intermediate metal not precious nor quite base in that it oxidizes easily but doesn't react to hydrochloric acid

i wonder how specific the mining industry is for machinery and production nd so on, if gold keeps rising, will we see miners that are going for nickel decide they like gold better of maybe switch to rare earths .. hard to know

right, as you say, the first course has been served, both etf's are at 52 week highs, prudence would say to wait ...

i heard once that joe kennedy got out of the stock market before the crash because he got a stock tip from his shoeshine boy

we are in an analogous situation now with commodities and the metals



> In chemistry, the term base metal is used informally to refer to a metal that oxidizes or corrodes relatively easily, and reacts variably with diluted hydrochloric acid (HCl) to form hydrogen. Examples include iron, nickel, lead and zinc. Copper is considered a base metal as it oxidizes relatively easily, although it does not react with HCl.
> 
> Base is used in the sense of low-born, in opposition to noble or precious metal[1]. In alchemy, a base metal was a common and inexpensive metal, as opposed to precious metals, mainly gold and silver. A long-time goal of the alchemists was the transmutation of base metal into precious metal.
> 
> ...


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## mogul777 (Jun 2, 2009)

HaroldCrump said:


> ....and less returns.


and less losses.


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## mogul777 (Jun 2, 2009)

fatcat said:


> pie, thanks for that clarification, i got my definition from wikipedia ...


Someone is getting sidetracked from the task at hand, focus man focus. 

Wth do you mean when you say market cap is similar but one fund is one year old and the other two and a half? You may want to investopedia market cap asap.


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## mogul777 (Jun 2, 2009)

fatcat said:


> right, i guess it depends on who the "it" is ....
> 
> i am in the camp that believes that at least for the moment, we are in an "all the old rules don't apply" situation
> 
> ...


Are you sure you want to lump yourself into the dumba$$ camp?? The way this is heading I'm going to end up perusing the holdings of each to make an educated decision.


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## fatcat (Nov 11, 2009)

> Wth do you mean when you say market cap is similar but one fund is one year old and the other two and a half? You may want to investopedia market cap asap.


 well, i was trying to say that the bmo fund has done better with investors which may or may not say something ... it is much newer and seems to have generated more interest and support than the older more established cmw ... just a point among many



> Are you sure you want to lump yourself into the dumba$$ camp?? The way this is heading I'm going to end up perusing the holdings of each to make an educated decision.


 i guess i'm being insulted but since i don't totally understand your point i will reiterate that even the pros don't know what's going to happen next, we are playing a new game for the moment, at least imo

back to the question at hand, i say that *zmt* is the more appropriate fund as it focuses on a well defined sector, base metals, quite well, *cmw* seems a little of a ******* child, it gives you lot's of miners but goes top heavy with precious metals

you would be better to buy the base metals and then another precious metals fund on it's own


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## mogul777 (Jun 2, 2009)

fatcat said:


> well, i was trying to say that the bmo fund has done better with investors which may or may not say something ... it is much newer and seems to have generated more interest and support than the older more established cmw ... just a point among many
> 
> i guess i'm being insulted but since i don't totally understand your point i will reiterate that even the pros don't know what's going to happen next, we are playing a new game for the moment, at least imo
> 
> ...


Asset base does not equal market cap, but good observation anyway. 

So history never repeats itself, eh? Only an idiot would believe that... just saying your choice to take offense or not. If you do you may want to rethink it since you'd be insecure in your opinion. 

Wouldn't buying two equivalent funds equate to making your own "******* child"??


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## andrewf (Mar 1, 2010)

So, I guess Mark Twain was an idiot:

"History does not repeat itself, but it does rhyme."


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## kcowan (Jul 1, 2010)

I just looked at this thread to see what Miningh is all about.

Good commentary! Too bad most people are not reading it...

It brings into focus the difficulty in doing any real due diligence on an ETF.


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## andrewf (Mar 1, 2010)

kcowan said:


> I just looked at this thread to see what Miningh is all about.
> 
> Good commentary! Too bad most people are not reading it...
> 
> It brings into focus the difficulty in doing any real due diligence on an ETF.


I personally do not buy these sector specific ETFs for the most part. I have IAU for precious metal exposure and a couple of base metal producers. I'm planning to dispose of the latter in the next while and get commodity exposure from the overall index and/or some commodity index ETFs/ETNs (like DBC).

If you're buying commodity exposure, I think it makes some sense to cut out the risk from the producers. I get execution risk from the rest of my equity portfolio. No need to concentrate that risk in one sector.

Only problem is that a lot of the commodity exchange traded products don't track underlying prices very well. There's a lot of activity in this area looking for innovative ways of providing this exposure without the drag caused by rolling futures contracts.


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## fatcat (Nov 11, 2009)

> I just looked at this thread to see what Miningh is all about.


 as i said earlier i misspelled mining and the board software will not allow me to correct the title of the thread so it will sail into history as miningh

mogul, let me try "de-offend" myself and move on here ...

i apologize, i was referring to the net assets of the funds not the market cap, so my mistake .... if acceptance by investors is any measure of a funds worth then the zmt has done much better than cmw, it is almost as large after being around a year and a half less, it also has much better trading volume (but, as i now realize, they are really not competing funds)

cmw from claymore and xma from ishares are fairly similar in that they both have lots of gold producers and precious metals with cmw being the larger fund and giving you a little of the whole smorgasbord

zmt on the other hand is smaller and more tightly focused on the base metals

i would (and will) buy zmt but wouldn't buy cmw or xma at this time

differing opinions on the specifics of each fund are welcome


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## fatcat (Nov 11, 2009)

> Only problem is that a lot of the commodity exchange traded products don't track underlying prices very well. There's a lot of activity in this area looking for innovative ways of providing this exposure without the drag caused by rolling futures contracts.


 like huc from beta pro i believe, which is designed to give direct exposure to oil as opposed to producers

i would like to find something like this for the cdn/usd that allows me to invest in cdn dollars


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## fatcat (Nov 11, 2009)

this is interesting, what would cause this ?
mini flash crash ? 
dropped and rose $3 in about 10 minutes
i noticed it was down about 3+ % 
and then i looked again and it was up 2+ %


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## andrewf (Mar 1, 2010)

fatcat said:


> like huc from beta pro i believe, which is designed to give direct exposure to oil as opposed to producers
> 
> i would like to find something like this for the cdn/usd that allows me to invest in cdn dollars


HUC probably has less problems with drag caused by rolling the contract, but any ETF that uses futures to gain exposure to the commodity will have this problem. HUC ameliorates it by rolling to the next December delivery, rather than rolling every month.

AFAIK, gold, uranium and silver are the only commodities that have exchange traded products to track the spot price minus storage and admin fees. I guess storage for most other commodities is too high a cost as a % of value to make it worthwhile. I think something using a swap based on the spot price of the commodity would work well enough, you just need to fine a counterparty that would be interested in that kind of arrangement.


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## fatcat (Nov 11, 2009)

here is a one year chart for both
wti crude on the top and huc on the bottom
looks close enough for me


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## andrewf (Mar 1, 2010)

On the betapro site, they show a chart of the roll yield out to Jan 2012. The one year yield is ~$4 a barrel, or 5%. Much better than you might get with monthly rolls, but over multiple years, that will certainly be a drag.


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## mogul777 (Jun 2, 2009)

andrewf said:


> So, I guess Mark Twain was an idiot:
> 
> "History does not repeat itself, but it does rhyme."


An unsourced line that may have been written by Twain. Or perhaps one that actually was: "It is not worth while to try to keep history from repeating itself, for man's character will always make the preventing of the repetitions impossible." (Mark Twain in Eruption: Hitherto Unpublished Pages About Men and Events, edited by Bernard DeVoto, 1940.)

Yes that's from Wikipedia... may want to verify, lol. 

"There is nothing new in the world except the history you do not know." 
-- Harry Truman 

And a classic Twain quote just for you: "It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt." 
-- Mark Twain 

Less time spent "learning" the useless knowledge you spout and more life experience and common sense would help you. Like I said before you need to understand the question before you can answer it successfully. So work on that, okay?


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## mogul777 (Jun 2, 2009)

fatcat said:


> as i said earlier i misspelled mining and the board software will not allow me to correct the title of the thread so it will sail into history as miningh
> 
> mogul, let me try "de-offend" myself and move on here ...
> 
> ...


What are you apologizing for? It's pretty easy to confuse market cap and asset value and lots of novice investors (and some beyond) do. 

Now that my curiosity has been raised I intend to check these funds out in slightly more detail this weekend. Funny that three pages later you have reached the same conclusion I did in reply #1.  

One additional comment don't be concerned by one day movements they are meaningless... well make that two... don't be confused or sidetracked by needless drivel others post focus on the important stuff.


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## andrewf (Mar 1, 2010)

Mogul, I don't know what you're getting so worked up about. I think I've made myself pretty clear. No need to take things personally and take on the patronizing tone. People do this a lot on the internet. It's really easy to treat people like crap when you can hide behind a computer. Hopefully those people don't behave that way around the people in their lives.

Cheers, and enjoy your Thanksgiving!


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## mogul777 (Jun 2, 2009)

andrewf said:


> Mogul, I don't know what you're getting so worked up about. I think I've made myself pretty clear. No need to take things personally and take on the patronizing tone. People do this a lot on the internet. It's really easy to treat people like crap when you can hide behind a computer. Hopefully those people don't behave that way around the people in their lives.
> 
> Cheers, and enjoy your Thanksgiving!


I'm not the one taking anything personally, but you've never been one to actually understand things.  Your condescending tone has been in use for a long time on here. The difference between us though is that I've earned my arrogance, what's your excuse? 

I treat people well, except for those who go out of there way to deserve otherwise. Consider calling people's posts out a service to this forum. Cheers.

PS: You also misinterpreted the quote you used to try and look wise above, lol. Calling Twain an idiot like that is in poor taste.

Now this thread is about mining so how about we stick to the topic?


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## andrewf (Mar 1, 2010)

If you think I was calling Mr. Clemens an idiot, I think maybe you need some help with reading comprehension, too.


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## furgy (Apr 20, 2009)

mogul777 said:


> Now this thread is about mining so how about we stick to the topic?


No it isn't , it's about "miningh"


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## mogul777 (Jun 2, 2009)

furgy said:


> No it isn't , it's about "miningh"


Haha, I was taking pity on the OP.


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## mogul777 (Jun 2, 2009)

andrewf said:


> If you think I was calling Mr. Clemens an idiot, I think maybe you need some help with reading comprehension, too.


Mr. Clemens? How cute. You've already shown your grasp of literature to be no better than and likely worse than your grasp of investing. You implied Mark Twain (Mr. Clemens) was an idiot in your failed attempt at implying I was the idiot which in turn of course makes you the village idiot. Congrats on that. Now I'm not insulting you just pointing out that you made a fool of yourself again. I'm actually suggesting that you stop doing that for your own good in lieu of the entertainment value. How noble of me. 

Also, for the forum readers that fall for your regurgitation as knowledge approach read the next line. You pass regurgitation 101, but have yet to come close to pass thinking and understanding 101. The forum needs to understand as do you that information without understanding is not productive. Point A before point B son. 

Now I thought I mentioned it was time to get back on topic. Note to moderators this needs to be posted publicly for the good of the forum.


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## humble_pie (Jun 7, 2009)

mohgggh

sometimes you are so crabbyh


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## andrewf (Mar 1, 2010)

Sorry I don't meet your expectations, mogul. I don't really see where literature enters into it. Literature is a bit more than the mere mention of authors, I would think. But I guess I have yet to be schooled in the matter by one such as you.

Mogul, I'll suggest that you review the forum rules put in place by our gracious hosts. And adding 'no offense' before an insult doesn't really put you clear of 11.


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## fatcat (Nov 11, 2009)

yes, i am the lazy / tired op who mispelled mining as miningh and then when i went back to correct it was unable to do so as this forum software apparently doesn't allow for thread titles to be edited 

let me also remind everyone that we are getting closer and closer to enacting godwin's law of nazi analogies and we saying nothing here about mining related etf's which are of interest to me and apparently a couple billion other people

anyone have any ideas on well made etfs or mf's that cover mining, both precious metals and base metals or both ?

mogul, you were going to do some research, what have you found ?


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## Belguy (May 24, 2010)

Just invest in the Sentry Precious Metals Growth and the Dynamic Focus+Resource funds and be done with it!!!

http://sentry.ca/en/products/mutualfunds/pmgf.html

http://204.225.175.217/fundprofile.aspx?f=H63K&s=A&c=CDN&lang=EN&r=9533


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## fatcat (Nov 11, 2009)

> Just invest in the Sentry Precious Metals Growth and the Dynamic Focus+Resource funds and be done with it!!!


 appreciate the recommend but they are charging 2.25 versus the BMO Junior Gold Miners which is charging .55, there is a lot of overlap but big differences at the top, do you have any sense of the value of their top holdings ?

also, this is a precious metals fund and i think base metals is a better long term buy and hold play (i do own some physical gold)

though sentry does have a good "in the mirror" record ..


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## andrewf (Mar 1, 2010)

I guess I don't understand what you're looking for. A good mix of international precious and base metal miners?


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## fatcat (Nov 11, 2009)

> I guess I don't understand what you're looking for. A good mix of international precious and base metal miners?


right with a heavier emphasis on the base metals though i have come to the conclusion that zmt and another precious metals fund is a better way to go ... i think the precious metals funds will be more volatile than the base metals which seem a better buy and hold proposition .. precious metals are hot right now but could cool very quickly, correct ?


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## andrewf (Mar 1, 2010)

Why speculate on this industry? You could always hold a gold ETF and a global base metal miner ETF. Check SPDRs...

Some are saying that the gold miners haven't benefited fully from the rise of gold prices, so that could be one reason to own the gold miners instead.


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## the-royal-mail (Dec 11, 2009)

fatcat, have you looked at the RBC Precious Metals Fund? Awesome performance, MER of 2.04%. Seems to be mostly gold mining companies.

"To provide long-term capital growth by investing primarily in equity securities of companies throughout the world involved directly or indirectly in the exploration, mining and production of precious metals (gold, silver and platinum) and in bullion, coins, receipts and certificates."

http://cart.morningstar.ca/QuickTakes/fund/f_ca.aspx?t=F0CAN05NGC&region=CAN&culture=en-CA


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## fatcat (Nov 11, 2009)

> Why speculate on this industry? You could always hold a gold ETF and a global base metal miner ETF. Check SPDRs...


that's what i think i will do zmt plus either the bmo junior miners or the xgd which has a lot of senior miners



> fatcat, have you looked at the RBC Precious Metals Fund? Awesome performance, MER of 2.04%. Seems to be mostly gold mining companies.


 excellent fund royal thanks .. performance vs index is very good ... don't like the mer but this fund has made it a pleasure to pay !


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## Henry (Jul 12, 2009)

*RBC D series*

https://www.rbcdirectinvesting.com/RBC:TLd4ho71A8UADOGCVVE/seriesd/index.html

MER of 1.21%

You need invest 10k and open RBC Direct Investing Account


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