After a disastrous 2013, mining stocks bounced back from their
lows at the start of 2014 and are trending higher. Commodity
prices, in particular gold and silver, have risen sharply this
year, as concerns on global economic growth and Fed tapering
plans once again increased the safe haven appeal.
This is especially true given signs of slowdown in China and
depressed emerging markets. Trading in emerging markets has been
rough of late on growing political and financial instability in
many nations as well as sliding currencies. Further, falling
equity markets are bolstering the demand for metals (read:
3 Sector ETFs Surging to Start 2014
This turnaround has finally shifted focus on the mining space,
leading to some strong performances in the broad commodity world.
Given this broad rally, the miners, who are often leveraged to
the price changes of their underlying commodities, have started
In fact, many mining ETFs have lately seen a spike with several
gaining nearly double digits from a year-to-date look, suggesting
that the bullish trend could continue for at least in the near
term. Below, we have highlighted three mining ETFs that are
leading the way in 2014 but are rather unknown within the space.
Any of these could be excellent plays for investors seeking to
ride this sudden move in the metal mining space even higher (see:
all the materials ETFs here
PureFunds ISE Junior Silver ETF (
This product provides a true small cap play on the silver mining
space. The fund has managed assets worth $1.7 million and trades
in a paltry volume of less than 5,000 shares a day. The ETF
charges 69 bps in annual fees. The product tracks the ISE Junior
Silver Small Cap Miners/Explorers Index.
In total, the fund holds about 24 companies with the largest
allocation going to top three firms - Fortuna Silver Mines (
), Endeavour Silver (
) and Silvercorp Metal (
) - which make up for nearly 12% each. In terms of country
exposure, Canadian firms dominate the fund at 74% while U.S.
securities make up for a 25% share. SILJ added over 18% in the
year-to-date time frame.
Global X Gold Explorers ETF (
This ETF provides exposure to the small basket of 19 gold mining
firms by tracking the Solactive Global Gold Explorers Index. The
product has $33.7 million in AUM and sees roughly 53,000 shares
in average daily volume. Expense ratio came in at 0.65% (read:
Can Gold Mining ETFs Dazzle in 2014?
The product is highly concentrated on the top firm - B2Gold Corp.
- making up for 15.28% of total assets. Other securities do not
hold more than 7.7% share. The fund mainly consists of the small
cap companies of Canada as these account for 82% of GLDX.
Australia, U.S. and United Kingdom take the remaining portion.
The ETF has gained nearly 16% so far this year.
Market Vectors Junior Gold Miners ETF (
GDXJ is also a small cap centric fund and follows the Market
Vectors Global Junior Gold Miners Index, holding about 69
securities in its portfolio. Once again, Canadian firms take the
lion's share at 60.1%, though Australia (20.8%) and the U.S.
(9.2%), round out the top three. Argonaut Gold, China Gold
International Resources and Semafo Inc occupy the top three
positions with a combined 13% share.
The fund amassed more than $1.4 billion in its asset base and
sees solid trading of nearly 1.3 million shares a day. The ETF
charges 55 bps in fees per year from investors and returned over
10.6% so far this year (read:
3 ETFs Surging on Weak Jobs Data
The mining ETFs have shown an impressive comeback from its past
year lackluster performance and is clearly outpacing the broad
market funds and other sector funds by a wide margin (read:
A Comprehensive Guide to Mining Industry ETFs
Investors should definitely consider mining ETFs in their
portfolio given the encouraging recent trends and global malaise.
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MKT VEC-JR GOLD (GDXJ): ETF Research Reports
GLBL-X GOLD EXP (GLDX): ETF Research Reports
PF ISE-JS SC ME (SILJ): ETF Research Reports
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