GDXJ.

On the 18th September 2020 Greatland Gold was added to the ETF for VanEck, and their fund that tracks the Junior Gold Mine Explorers.

Fund Description

“VanEck Vectors^® Junior Gold Miners ETF (GDXJ^®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS^® Global Junior Gold Miners Index (MVGDXJTR), which is intended to track the overall performance of small-capitalization companies that are involved primarily in the mining for gold and/or silver.”
_{Source: https://www.vaneck.com/etf/equity/gdxj/overview/}

What’s in it for Greatland Gold.

I asked some fellow long term investors why they thought the benefits of being included in an ETF, like GDXJ. This is what they said, and should be noted that this is their opinion on it, and not fact.

“Security” – Investors who may be interested will find security in the fact we are part of a Global ETF.

“Strength” – Not all companies make it into this particular ETF. In fact, every quarter the index is rebalanced so that they can add or remove those companies whose performance has changed.

“The shares are no longer on the open market.” – When the ETF bought the shares, they removed over 120m of shares from the open market, this reduces volatility and stabilises the share price.

“Cost of Capital has been reduced” – Important for any company that is funded by investments.
^{https://www.thestreet.com/investing/what-is-cost-of-capital-14814298}

“Promotion to Division 1 of global miners”, No longer just a minor explorer.

“$8bn of other money tracks the fund further investment” – there is a large amount of money that follows the GDXJ, we can expect a proportion of this to come into the company while we hold a position in the fund.

“Global recognition of GGP amongst peers and fund managers with access to new investors in the US market”
More and more people are now being exposed to Greatland Gold.

Thanks to “Hydro”, “Rational Assessor” and “Mr Feasible” for their input in this section.

What are the criteria for entry?

“The modified market cap-weighted index tracks the performance of the most liquid junior companies in the global gold and silver mining industry. The pure-play index contains only companies that invest primarily in gold or silver, or generate at least 50% of their revenues from gold or silver mining or own properties that have the potential to generate at least 50% of their revenues from gold or silver mining when developed. The MVIS Global Junior Gold Miners Index (MVGDXJ) has been licensed to underlie financial products with currently USD 8071.22 million in assets under management.”

Size and Liquidity Requirements

Full MCap of at least 150 mln USD. Three-month average-daily-trading volume of at least 1 mln USD at a review and also at the previous two reviews. At least 250,000 shares traded per month over the last six months at a review and also at the previous two reviews.

MVIS? I thought this was owned by Van Eck Associates Corporation.

Well yes, it is, Van Eck Associates Corporation Administer the fund, However, the index is maintained by MVIS.

“MVIS – MV Index Solutions develops, monitors, and markets the MVIS indices, a focused selection of pure-play and investable indices.”

It should be noted that MVIS. is a Trademark of Van Eck Associates Corporation.

I keep hearing that the fund is worth 6.5 Billion, but my research suggests that it is only worth $396.5M

There are two funds under the same name. There is the main fund ($6.5B) and the fund that follows the European Laws, “VanEck Vectors Junior Gold Miners UCITS ETF” – when you use the VanEck website, You are asked to select which company you are from, Use Great Britain, and you will be taken to the European fund. Choose USA and you will be taken to the page for the main fund.

How many shares did VanEck buy?

After the 3rd Quarter re-balance on the 11th September, Van Eck Associates Corporation purchased 121,770,099 shares, to the value of £33m GBP. on 18th September 2020.
Further info on the shares held can be found on the VanEck website.

Do They Balance Daily or Quarterly?

The weightings are updated Quarterly, by MVIS, and Van Eck adjusts the number of shares they need a week later.
However, if someone buys or sells into/out of the ETF, shares must be added/liquidated accordingly based on the value of the shares in the transaction. the latest daily holdings can be found here.

What is Front Running

Some have cottoned on to the fact that the GDXJ Fund, announces its attention ahead of time. this means for some companies, there are large buy orders due at a specific time a week later, so they will buy into the share ahead of time to capitalise on the expected rise in share price, only to sell out as soon as the transaction is completed.