October HANARO ETF Report Released: "Gold Rally Highlights Investment Appeal of Mining Companies"

NH-Amundi Asset Management announced on October 2 that it has published the 'October HANARO ETF Monthly Report'.

The October report focused on the ongoing gold price rally since the beginning of this year. As of September 30, the price of gold reached $3,873.2 per ounce, marking a record high and rising approximately 47% compared to the start of the year. This surge is the result of several factors, including the decline in the value of the US dollar, increased demand for gold as an alternative asset, and growing global economic uncertainty.

Central banks around the world are actively increasing their gold purchases. As efforts to diversify foreign exchange reserves away from US Treasury securities accelerate, the volume of gold purchases continues to rise. In addition, the US Federal Reserve cut interest rates by 0.25 percentage points last month. The return to an easing cycle after nine months is also supporting the rise in gold prices.

NH-Amundi Asset Management suggested that investors interested in gold during this period of rising prices should focus on gold mining companies. Because gold mining companies incur significant fixed costs, such as mine operating expenses, their profits tend to increase more sharply when gold prices rise. This year, while gold prices have climbed, mining costs have remained stable, leading to a significant improvement in the earnings of major gold mining companies, which has also been reflected in their stock prices.

This year, the share prices of gold mining companies have risen even more sharply than gold prices themselves. According to the Korea Exchange, as of September 30, the HANARO Global Gold Mining Companies ETF surged 109.22% since the start of the year, while the KRX Gold Spot Index rose only 52.31% over the same period.

Gold mining companies are also attractive because they are "stocks." Unlike physical gold, their fair value can be assessed using valuation indicators. Looking at the average indicators of the stocks included in the HANARO Global Gold Mining Companies ETF, earnings per share (EPS) have been steadily rising as their performance improves. The average EPS increased from $62.1 at the end of last year to $107.3 in the second quarter of this year.

Active shareholder return policies such as dividends and share buybacks are also noteworthy. Newmont is planning a $3 billion share buyback, and Agnico Eagle Mines has paid cash dividends for 42 consecutive years since 1983.

Kim Seungcheol, Head of ETF Investment at NH-Amundi Asset Management, said, "Gold mining companies, which are seeing improved performance thanks to rising gold prices and stable mining costs, are an attractive investment destination that also offers dividend income."

This content was produced with the assistance of AI translation services.