ETF Spotlight: Junior Silver Miners

ETF Trends

ETF Spotlight on the PureFunds ISE Junior Silver ETF (SILJ) , part of an ongoing series.

Assets : $1.5 million

Objective : The PureFunds ISE Junior Silver ETF tries to reflect the performance of the ISE Junior Silver Index, which tracks small-cap companies that engage in silver exploration and mining.

Holdings : Top holdings include Endeavour Silver Corp (EXK) 12.1%, Silvercorp Metal Inc (SVM) 11.9%, Fortuna Silver Mines Inc (FSM) 11.4%, Mag Silver Corp (MVG) 11.4% and Silvercrest Mines (SVLC) 5.1%.

What You Should Know :

  • Factor Advisors sponsors the fund.
  • SILJ has a 0.69% expense ratio.
  • The ETF has 26 holdings and the top ten make up 73.1% of the overall portfolio.
  • Market capitalization breakdown includes small-cap 47.8% and micro-cap 52.2%.
  • About 98.4% of assets are in North American miners, with a small 1.6% in U.K. miner exposure.
  • SILJ is up 4.5% over the past month, but down 10.2% over the last three months and down 52% over the past year.
  • “The resulting strong demand in recent years for silver as an alternative currency, an investment metal, and an industrial metal has increased the need to bring more metal into production,” according to PureFunds. “We believe the increased demand for silver should benefit the companies that discover new economic silver deposits or produce the sought after metal.”
  • Silver prices have historically been more volatile than gold.
  • The volatility can be attributed to silver’s larger role as an industrial metal, along with its safe-haven investment appeal.
  • “During times of market dislocation, high inflation expectations, or economic uncertainty, investment demand for silver becomes the main price driver,” according to Morningstar analyst Alex Bryan. “This investment demand can push silver prices higher during bad times, allowing silver to offer partial portfolio insurance.”
  • Potential investors should note that the fund shows an average daily volume of 5,836, according to Morningstar data, and should use limit orders to better control trades.

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