If it ain’t broke, why fix it? The GDX is way up, but VanEck is switching horses midstream.
The gold price hit a record high of US$3,707.34 per ounce on Wednesday (September 17), shortly after the US Federal Reserve’s decision to make its first cut to interest rates since December 2024.
That put the precious metal’s price up 40 percent since the start of 2025.
It’s been a long time coming, but it seems gold-mining stocks are finally responding to record gold prices.
The VanEck Gold Miners ETF (ARCA:GDX), whose holdings include the biggest global gold-mining companies, was up by 103.54 percent year-to-date as of Thursday (September 18).
The GDX has tracked the price and yield performance of the NYSE ARCA Gold Miners Index since its inception in May 2006. That came to an end on Friday (September 19) as it switched to the MarketVector Global Gold Miners index.
What does the GDX index change mean for gold investors?
It may seem counterintuitive for global investment management firm VanEck to make a change to the index for the popular US$20.5 billion GDX, but there are plenty of good reasons.
The switch was planned a few months ago in conjunction with housekeeping that’s a routine component of exchange-traded fund (ETF) management. The move to the MarketVector Global Gold Miners Index is happening at the same time that the firm would normally rebalance the weight of its positions in GDX’s underlying securities.
And the move makes sense. Not only is MarketVector a subsidiary of VanEck, but it is based on free-float market-cap-weighted methodology that many major stock indexes now use.
“By focusing only on shares available for public trading, excluding those held by insiders or restricted from the market, this method offers a more accurate reflection of market dynamics than the full-market capitalization method,” explains Investopedia, noting that this approach is used by indexes like the S&P 500 (INDEXSP:.INX).
It seems VanEck is joining the rest of the global financial community, which has transitioned away from full market-cap-weighting methodologies like that used by NYSE ARCA Gold Miners Index.
So what can GDX investors expect from this change?
They probably won’t see much difference right away besides slight adjustments to how some stocks are weighted in the fund, or which stock listing is used for companies with multiple stock listings.
For example, major miner Newmont (TSX:NEM,NYSE:NEM,ASX:NEM) — which is among the ETF’s top five holdings — will be weighted at 6.95 percent from 12.99 percent.
Chart via VanEck.
Over the long term, however, GDX may see a boost in performance, including less volatility and better liquidity, as the dead weight is cut away and the largest companies are no longer concentrated at the top. This could represent a major growth opportunity for GDX investors, especially if this bull run on gold and gold-mining stocks continues.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
