FactorShares, the ETF provider recently acquired by GenCap
Ventures, Thursday rolled out three equities
that invest in miners and explorers, further slicing and dicing a
segment that's populated by funds from providers such as iShares,
State Street Global Advisors and Market Vectors, to name a few.
The ETFs, all of which replicate ISE benchmarks that target
foreign companies and a smattering of U.S. mining names, join the
likes of the U.S.-focused $1.1 billion SPDR S&P Metals and
Mining ETF (NYSEArca:XME), the global Market Vectors Rare
Earth/Strategic Metals ETF (NYSEArca:REMX), which has $162 million
in assets, and the $219 million iShares MSCI Global Select Metals
& Mining Producers Index Fund (NYSEArca:PICK).
FactorShares's funds each cost 0.69 percent in annual expense
ratio, according to the most recent prospectus filed with
regulators. The ETFs, their tickers and investment strategies
are as follows:
- PureFunds ISE Diamond/Gemstone ETF (NYSEArca:GEMS) invests in
the largest and most liquid companies that produce, explore and
sell gemstones. The fund's underlying index comprises some 26
names, the bulk of which are non-U.S. companies. Petra Diamonds
Ltd., Harry Winston Diamond Corp. and Chow Tai Fook Jewellery
Group Ltd. are among the top holdings.
- PureFunds ISE Mining Service ETF (NYSEArca:MSXX) invests in
companies that facilitate the operations of mining services such
as those that manufacture, lease and sell equipment to companies
that provide consulting or other services to the industry as well
as those that work with actual exploration and extraction.
The ISE index benchmarking the fund included 31 names in July
such as Mineral Resources, China Coal Energy Company H Shares and
Joy Global Inc.
- PureFunds ISE Junior Silver ETF (NYSEArca:SILJ) invests in
small-cap silver miners and explorers including those that mine,
explore and refine silver. The 28-holding index underlying the
strategy had Endeavour Silver Corp., Fortuna Silver Mines Inc.
and McEwen Mining Inc. among its top names.
FactorShares' New Management
FactorShares already sponsors a quintet of leveraged spread
funds, but its latest move would be the first under its new
FactorShares was acquired by Gencap in July, a company that aims
to help clients bring to market ETFs under the Securities Act of
1933 and the Investment Company Act of 1940, including both
passively and actively managed '40 Act ETFs.
Gencap's business model represents a budding new trend in the
ETF space featuring investment managers entering the ETF market
with the help of a third party. The third parties provide
interested asset managers with infrastructure and platform in order
to launch their ETFs, saving them the trouble of trying to build an
ETF unit from scratch.
Other companies serving up the "ETF-In-A-Box" concept include
the Oklahoma City-based Exchange Traded Concepts-the firm behind
the Yorkville MLP ETFs-as well as Bethesda, Md.-based
AdvisorShares, which helps others bring ETFs to market that use the
AdvisorShares brand name.
Factor Advisors LLC will serve as the investment advisor to the
funds, while Esposito Partners LLC will be the subadvisor.
Esposito Partners is related to Dallas-based Esposito
Securities, a trading firm that has also been involved in providing
seed capital for new ETFs.
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