New Gold-related ETF

Van Eck Associates Corp.'s Market Vectors Trust has registered an Exchange Traded Fund (ETF) designed to track shares of public gold miners. The fund, if approved, would track the Amex Gold Miners Index (GDX). The index has 43 companies and top holdings include Newmont Mining Corp (NEM), Barrick Gold Corp. (ABX) and Goldcorp Inc. (GG) . The new ETF from Van Eck will have a total expense ratio of 0.55%.

Mining stocks tend to be more volatile than the metal because of the associated risk of company's mistakes and other geopolitical factors. These stocks, however, receive kinder tax treatment than bullion. Precious metals are classified as a "collectible" by the IRS. If Gold metal is held for more than one year, gains are taxed at a 28% rate, compared with the 15% rate applicable to long-term capital gains on most stocks including the mining stocks.

To remind our readers, ETFs for Gold metal have been introduced last year and had great run over the last few months. These are StreetTracks Gold Trust (GLD) and Barclays' iShares Comex Gold Trust (IAU) [read our past posting].