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Silver Shines Among 2016's Best ETFs

ETF Professor

This is how strong silver and the related exchange-traded funds have been in 2016: The iShares Silver Trust (ETF) (NYSE: SLV) labors 23.2 percent below its 52-week high set in August, putting the largest silver ETF in a bear market, but SLV is still higher by 14.7 percent year-to-date.

Although silver has recently succumbed to profit-taking and the strong dollar, four of this year's best-performing non-leveraged ETFs are directly exposed to silver mining in some form or fashion. That group is led by the FactorShares Trust (NYSE: SILJ).

As was recently noted in this space, SILJ is this year's best-performing materials ETF. It also epitomizes the feast or famine nature of the silver equities trade. SILJ is off more than 40 percent from its 2016 high, but still sports a year-to-date gain of over 132 percent.

Silver Miners

However, SILJ remains the preferred avenue for tapping a rally or rebound in silver mining stocks. SILJ's large-cap rivals, the Global X Silver Miners (NYSE: SIL) and the iShares Inc. (NYSE: SLVP), are up an average of “just” 75 percent this year. SLVP and SIL are also among the top 10 non-leveraged ETFs this year.

Keeping with the theme of miners equities in leadership roles this year, there is the Global X Copper Miners ETF (NYSE: COPX). With a year-to-date gain of nearly 72 percent, COPX also resides among the top 10 non-leveraged ETFs.

Knowing that copper and silver are two of the best-performing metals this year, it is not stunning that the iShares MSCI All Peru Capped Index Fund (NYSE: EPU) is higher by nearly 59 percent. Peru is a major copper producer and one of the world's largest silver producers. EPU's performance this year has it ranked among the top 10 non-leveraged ETFs and is good for one of the best showings among single-country ETFs.

The second-best single-country ETF this year and also a member of the top 10 list is EPU's Brazilian counterpart, the iShares MSCI Brazil Index (ETF) (NYSE: EWZ). However, some of the shine has come off the LatAm trade as EPU and EWZ are lower by an average of 2.7 percent over the past 90 days.

Resurgence

Another prominent theme among this year's top ETFs is resurgence. Just look at the Market Vectors-Coal ETF (NYSE: KOL) and the Market Vectors Steel (ETF) (NYSE: SLX). Both are among this year's 10 best ETFs and are up an average of 98 percent.

President-elect Donald Trump has a lot to do with that.

As Benzinga reported last month: “Even before Trump's victory, steel stocks seemed to shake off the sluggishness that had plagued them since 2010. Steel stocks heralded 2016 by making a turn for the better, with the government's initiative to penalize dumping of steel by Asian countries proving salubrious for the stocks.” 

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