Get exposure to gold miners

Gold mining shares are trading at record lows. But picking winners is hard. So, you're best bet is to buy an exchange-traded fund, says Paul Amery. Here, he looks at three.

According to at least one key measure, gold mining shares are as cheap as at any time in the last 30 years. The ratio between the Philadelphia Gold and Silver Index (XAU) and the gold price recently dipped below 0.1, a level it's seen only once before, during the depths of the late-2008 crisis. Sounds good. But picking gold mining winners is notoriously hard. So to gain simple, diversified exposure to the sector as a whole, it's worth considering an exchange-traded fund (ETF).

For UK-based investors, three ETFs fit the bill: iShares' S&P Commodity Producers Gold ETF (LSE: SPGP), ETF Exchange's DaxGlobal Gold Mining Fund (LSE: AUCO, AUCP for listings in dollars and sterling, respectively) and the RBS Market Access NYSE Arca Gold Bugs Index ETF (LSE: GOLB). But which should you buy?

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Paul Amery

Paul is a multi-award-winning journalist, currently an editor at New Money Review. He has contributed an array of money titles such as MoneyWeek, Financial Times, Financial News, The Times, Investment and Thomson Reuters. Paul is certified in investment management by CFA UK and he can speak more than five languages including English, French, Russian and Ukrainian. On MoneyWeek, Paul writes about funds such as ETFs and the stock market.