FactorShares, the ETF provider recently acquired by GenCap
Ventures, filed updated paperwork with U.S. regulators detailing
plans to market equities ETFs that would invest in miners and
explorers, penning in tickers and fees for the funds.
The strategies would further slice and dice a segment populated
by the likes of the U.S.-focused $740 million SPDR S&P Metals
and Mining ETF (NYSEArca:XME), the global Market Vectors Rare
Earth/Strategic Metals ETF (NYSEArca:REMX) or the iShares MSCI
Global Select Metals & Mining Producers Index Fund
In this latest filing, FactorShares disclosed that its three
miner-linked funds, all of which would replicate ISE benchmarks
that target foreign companies and a smattering of U.S. names, would
each have 0.69 percent annual expense ratios.
The funds, their tickers and investment strategies are as
- The PureFunds ISE Diamond/Gemstone ETF (NYSEArca:GEMS) will
invest 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) will invest
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) will invest
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 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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