Investors in precious metals are opting for streaming and royalty companies over pure gold and silver miners this year despite a rise in metal prices, as producers struggle to win confidence in their ability to capitalise on the rally.

Streaming and royalty companies provide financing for exploration and development to precious metals producers in return for a cut of any future output. That gives them exposure to a range of companies in the gold sector, rather than being reliant on any individual stock.

The model makes them a nominally safer bet for investors, but gives them lower leverage to a strong rise in underlying gold prices.

Among the biggest streaming companies, shares in Toronto-based Franco-Nevada (FNV.TO) are up 24 percent and Royal Gold Inc (RGLD.O) is 40 percent higher this year, while among smaller names, Osisko Gold Royalties (OR.TO) has risen 25 percent.

Streaming companies’ higher net asset value shows how much more favourably investors view their risk profile compared to those of the underlying mining companies.

Gold producers’ failure to capitalise on rising prices has been a familiar gripe over the last 15 years. While gold prices, despite their retreat from 2011’s record high, are still up more than fourfold from end 2001 levels, none of the top five gold miners has even doubled its share price in that time.

The dividend yields of the major mining companies, a measure of the productivity of an investment, have fallen back sharply since the steep drop in gold prices of 2013. Those of streaming companies have held firm.

But while risks may be diversified, investment in gold streaming companies still gives, in theory, less exposure to rising gold prices than an investment in a mining company.

With gold prices up this year, and expected to extend gains for a third year in 2017, the mining companies should look more attractive. But that has not happened in practice.

In this environment, the more defensive streaming companies are still attractive.