Three New Pure Play ETFs From FactorShares PureFunds

Analysis/Opinion: The energy sector has long had funds targeting the energy services subsector.  Now for the first time, PureFunds ISE Mining Service (NYSEARCA:MSXX) brings the “services” niche to the materials and mining sector.  Unfortunately, I could not locate any information on how such an approach would have performed historically.

PureFunds ISE Junior Silver (Small cap Miners/Explorers) (NYSEARCA:SILJ) seeks to track publicly traded small-cap companies active in silver mining exploration and production.  The underlying index has 26 holdings including Endeavour Silver Corp 11.7%, Fortuna Silver Mines Inc. 9.7%, McEwen Mining Inc 9.6%, Bear Creek Mining Corp 8.6%, and Mag Silver Corp 7.6%.  Country weightings are Canada 79%, US 16%, Australia 4%, and UK 1%.  Additional information is located in the PureFunds ISE Junior Silver (Small cap Miners/Explorers) (NYSEARCA:SILJ) overview and SILJ fact sheet (pdf).

Analysis/Opinion: Like GEMS and MSXX, SILJ is a first of its kind fund.  Additionally, like its brothers, the sponsor did not provide any information regarding performance or risk expectations.  If we were to use Market Vectors Junior Gold Miners (NYSEARCA:GDXJ) versus Market Vectors Gold Miners (NYSEARCA:GDX) as a guide, then we would expect PureFunds ISE Junior Silver (Small cap Miners/Explorers) (NYSEARCA:SILJ) to have 1.3x the volatility and drawdown of Global X Silver Miners (NYSEARCA:SIL).

This article was originally written by Ron Rowland, and posted on InvestWithAnEdge.