GDX and GDXJ

escobar

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I own some of these miner ETFs GDX and GDXJ. Saw this article on seeking alpha:

http://seekingalpha.com/article/311...e-and-capital-gains-distributions-in-december

anyone know where this large income from GDXJ comes from? I thought the majors paid more dividends and the juniors. In the top few holdings of GDXJ I cannot find much dividends. Anyone know where this is coming from? Last year it was like $2 per share or 10%.

Thank you.
 

DSAbug

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SVM pays a pretty large dividend.

HL, CDE, ANV, GSS, NG are all pretty big companies that are components of the GDXJ. I'm not really sure how exactly they came up with a 2% dividend last year, but the GDXJ aren't really "juniors" so to speak. They are just small producers that are ramping up production or mid tier producers trying to become majors. Some of them are even in the HUI.

Remember.. this is an actively managed fund.
 

escobar

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i looked at svm, its a little over 1% dividend and its not even the top holding. dont think tha woud explain a 10% distribution last yr.

this is the authors reply from seeking alpha to my question:

It comes from the companies classified as Passive Foreign Investment Companies, because they are structured to receive royalties rather than earnings from mining operations. So even though they don't pay a dividend, GDXJ has to take its share of their net earnings in as a dividend equivalent, and then distribute it - even though they never received any cash.

frankly i am a little worried how hard this has been to track down. i cant figure it out. i emailed the manager but no response yet. i dont think the author's rsponse answers the question becuase if they r paying cash out from non cash earning where do they get the cash ro distribute. doesnt make sense to me.
 

escobar

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http://www.traders-talk.com/mb2/index.php?showtopic=92028

saw this chart. sure looks like this gold / XAU ratio is reaching the peak its last reached in the crisis. it then went on to triple over next 3 yrs. Amazing how consistent the range was for 7 yrs between about 3 and 5 then during the crisis ratio went parabolic and never came back.

if gold recovers next yr and confidence stabilizes that these prices are sticking then the ratio could drift back down to 6 or 5 or overshoot on the way down to 3 like they always have after a rise. would make the gdx and gdxj home runs.

any thoughts?
 
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