(Bloomberg) -- Even after the world's biggest gold-mining companies posted their best profit margins in four years, investors can't seem to head for the exits fast enough. They're betting the industry's returns have reached a high-water mark, at least for a while.

The biggest ETF linked to the producers, VanEck Vectors Gold Miners ETF, has seen net withdrawals this month of $617 million following a record outflow in April of almost $1.1 billion, data compiled by Bloomberg show. The $10 billion fund tracks the value of global producers including Barrick Gold and Newmont Mining.

During 2016, investors poured record amounts of money into the fund as mining executives cut debt and operating costs, setting up bigger profits as bullion posted its first annual increase in four years. But the gold rally has faded, with prices down about 10% from last year's highs, and some companies are finding it more difficult to tighten their belts further, dimming prospects for increased cash flow.

"It's harder, I think, for gold investors to really find the compelling reason to invest," said Matthew Korn, an equity analyst at Barclays in New York, who has an equal-weight rating on Barrick. "There wasn't a lot that was offered by the big majors to bring in that margin investor."

Among nearly four dozen companies tracked by the S&P/TSX Global Gold Sector Index, median earnings per share in the first quarter grew 40% from a year earlier. On average, results were about 30% higher than forecast, data compiled by Bloomberg show.

Operating margins turned positive in the fourth quarter, and rose in the period ended March 31 to the highest in four years. Profit margins were at 4%, the most since the first quarter of 2013.

PRICES LANGUISH

But improved returns haven't helped boost the overall value of the industry. The S&P gold mining index is down 24% from last year's peak in August.

That's partly because gold, which traded at $1,248.66 an ounce on Wednesday, has slipped 3.6% from a five-month high in April and is down from last year's high of $1,375.34 in July. Prices have languished as demand for a haven investment fades and rising borrowing costs make bullion less competitive against assets that pay interest.

Some investors also aren't convinced mining companies will be able to squeeze more of the cost cut that helped revive profit over the past few quarters.

Toronto-based Barrick, the world's largest producer, reported a fourth straight quarterly profit on April 24. But the company also noted that its all-in sustaining costs had increased, muting the benefits of a gold rally during the period. The next day, Barrick shares, which doubled in value last year, plunged 11%. After that, the VanEck ETF saw a one-day outflow of $543 million that was the biggest ever. Barrick is the fund's top holding and viewed by some investors as a bellwether for the industry.

NO REWARD

Newmont, the No. 2 producer and VanEck's second-largest holding, also wasn't spared. The Greenwood Village, Colorado-based company reported first-quarter earnings that beat analysts' adjusted estimates by 16%. It also disclosed operating costs that were lower than expected. The shares posted two straight weekly declines.

On average, big gold producers tracked by Bloomberg Intelligence curbed their all-in sustaining cash cost in the first quarter by 28% from a record high in 2012.

But Barrick saw an increase in the period to $772 an ounce, compared with a low of $704 in the third quarter, because of higher expenses at mines in Nevada and Argentina. Barrick also disappointed on output. The company produced 1.31 million ounces in the quarter, below the average estimate of five analysts. It now expects to mine 5.3 million to 5.6 million ounces in 2017, less than a previous forecast of as much as 5.9 million.

'SPEED BUMP'

While the Barrick news dismayed some ETF investors, Goldman Sachs analysts including Andrew Quail said they view the weak quarter as "just a speed-bump in an otherwise solid track record." The bank has a "buy" recommendation on the stock.

"Barrick had been a big leader in this space for the last year and half, as they've done a good job right-sizing their portfolio and getting their balance sheet in shape," said Dan Denbow, a portfolio manager at the $600 million USAA Precious Metals & Minerals Fund in San Antonio. The stumble in the first quarter was a chance for some investors "to just take some profits," after the shares had surged last year, he said.

Still, there's a limit to how much costs can be reduced, Barclays' Korn said. The price of crude oil, used to run mining machinery and drilling equipment, has climbed more than 80% since trading at a 12-year low in 2016. A basket of currencies from major commodity producers including Canada, Brazil and Australia has gained 4.4% in the past 12 months, helping to increase costs for mines that generate most of their revenue in dollars.

Barrick's production miss may compound investor concern for the rest of the industry, said Alan Gayle, a senior strategist at RidgeWorth Investments in Atlanta, which oversees $42 billion and unloaded its VanEck gold-fund holdings by the end of 2016.

"The underlying fundamentals may not be as secure as we'd like them to be," Gayle said. Barrick's revised production outlook "could have a sympathetic impact on other miners," he said.

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