New Global X Junior Miners ETF (JUNR)


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Global X Funds, best known for its niche emerging market ETFs, has rebranded one of its ETFs to play global small-cap miners.

Global X S&P/TSX Venture 30 Canada ETF was converted into Global X Junior Miners ETF ( JUNR ) and tracks a new index, the Solactive Junior Miners Index. It includes 96 companies that dig up gold, silver, copper, iron, nickel, titanium and other basic materials.

"As large miners exhaust existing resources, junior miners are often poised to explore, develop and monetize new mines to bring additional supply to the market," Global X said in a statement. "Investors may also benefit from increased merger and acquisition activity in the sector, as large mining companies look to acquisitions and partnerships as additional sources of supply and geographic expansion."

Stocks come from more than 10 countries including Canada, weighted 34%, Australia 26%, the U.S. 18%, the U.K. 7% and China 4%.

JUNR will compete with SPDR S&P Metals & Mining ( XME ), EGShares Emerging Markets Metals & Mining ETF ( EMT ) and numerous other metal specific mining ETFs.

Metals and miners ETFs rallied sharply last week after the Chinese government announced new infrastructure projects to create railways, roads and airports to lift economic growth.

"Let's face it, hard assets are finite and the supply decreases every day while the global demand increases daily," said Anthony Welch, a partner at Sarasota Capital Strategies in Osprey, Fla.

"Lower supply and higher demand equal higher prices -- the first lesson of any economics class." He believes all portfolios should have some long-term holdings in basic materials.

New RBS Alternator Note

The Royal Bank of Scotland has rolled out a new exchange traded note that tracks an index that switches in and out of three ETFs.

RBS US Large Cap Alternator Exchange Traded Notes ( ALTL ) offers the returns generated from rotating between the S&P 500 Total Return Index, the S&P 500 Low Volatility Total Return Index and the S&P 500 Equal Weight Total Return Index based on relative strength.

The indexes are scored based on their performance over the past one, three, six, nine and 12 months. The fund holds the index with the highest score every month. The logic is that the low volatility index will outperform the S&P 500 during bear and volatile markets, the prospectus states.

The equal-weighted index has the same exposure to all companies in the index, while benchmark S&P 500 Total Return is market-cap weighted and has more exposure to the largest companies. The equal weighted index will likely be more volatile than the benchmark because it has more exposure to small-cap stocks.

Rick Ferri, founder of Portfolio Solutions in Troy, Mich., is skeptical about this fund. "They have back tested the index-flipping strategy and tortured the data until it confessed to adding alpha (returns)," Ferri said. "How can any company issue a fund that didn't hypothetically beat the market?"

Ferri also doesn't like that it's an exchange traded note, which is a debt obligation issued by the firm. Changes in the company's creditworthiness may affect the ETN's value.

The ETN charges an annual management fee of 1% of assets.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing ETFs
Referenced Stocks: ALTL , EMT , JUNR , XME

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