Three New Pure Play ETFs From FactorShares PureFunds

Page 1 of 2

Three New Pure Play ETFs From FactorShares PureFundsFactorShares, the sponsor that introduced spread trading in an ETF wrapper back in early 2011, launched a new line of ETFs under a new PureFunds brand.  According to the firm’s literature, PureFunds was designed to provide the market with easy access to niche sectors through Pure-Play ETFs.  PureFunds aims to launch tactical ETFs that the market desires but do not currently exist.  The three new ETFs began trading November 29, have expense ratios of 0.69%, share a common prospectus (pdf), and will be assigned to the Materials Sector category of the ETF Field Guide.

PureFunds ISE Diamond/Gemstone ETF (GEMS) seeks to track global companies actively engaged in the gemstone industry including exploration, production, or sales.  The underlying index has 23 holdings including Signet Jewelers Ltd 9.0%, Chow Tai Fook Jewellery Group Ltd 8.7%, BHP Billiton Ltd 8.3%, Harry Winston Diamond Corp 8.1%, and Luk Fook Holdings International Ltd 7.1%.  Country allocations are Hong Kong 28%, UK 20%, Canada 19%, US 18%, Australia 12%, and Japan 3%.  Additional information is located in the GEMS overview and GEMS fact sheet (pdf).

Analysis/Opinion: This is not a physically backed diamond ETF.  The prospect of a diamond ETF has been the focus of much media speculation the past year.  I’m on record with my opinion that implementing such a fund could be tricky due to the qualitative nature of valuing gems and lack of futures contracts or other trading vehicles.  GEMS is a unique offering, but it should probably have “producers” or “industry” in its name to avoid being mistaken for a physically backed fund.

PureFunds ISE Mining Service (NYSEARCA:MSXX) seeks to track the performance of the largest and most liquid companies involved in facilitating the operations of the mining services industry as a whole, from companies that manufacture, lease, sell, and provide equipment to companies providing consulting and other related services.  The underlying index has 30 holdings including Atlas Copco AB A 9.6%, China Coal Energy Co Ltd H Shares 9.1%, Joy Global Inc 8.1%, Monadelphous Group Ltd 7.5%, and Mineral Resources 7.4%.  Countries with current weightings of 10% or greater include Australia 48%, US 17%, Canada 11%, Hong Kong 10%, and Sweden 10%.  Additional information is located in the PureFunds ISE Mining Service (NYSEARCA:MSXX) overview and MSXX fact sheet (pdf).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 30 percentage points in 13 months Learn how!

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!