Five Silver ETFs Surging On Commodity Strength

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August 15, 2013 4:39pm NYSE:AGQ NYSE:SIL

silver demandThanks to a recent bout of commodity strength, mining stocks have been surging higher lately. Most investors have been focused in on gold mining securities though, as these have taken the lion’s share of interest as of late.

This is for good reason too, as gold mining ETFs like (GDX) have seen double digit percentage increases over the past week, while others, like the junior gold miners ETF (GDXJ), have surged by over 20% in the past week alone. Given these kinds of moves, it is easy to see why investors have been so focused on the now-surging space in recent trading (see 3 Mining ETFs Finally on the Upswing).

However, another corner of the precious metal world has also done quite well lately, silver. The white metal has seen incredibly firm trading too over the past few sessions, and it has actually outperformed gold in many respects.

This is especially true in the silver mining space as these often trade as a leveraged play on the underlying metal, and with silver being more volatile than gold, they can truly take off in bull runs. Below, we briefly highlight five of the top performing silver ETFs over the past week, any of which could be interesting short-term selections, should the surge in silver prices continue:

Global X Silver Miners ETF (SIL)

This product tracks the Solactive Global Silver Miners Index, tracking a basket of roughly 30 companies in the silver mining industry. Top weights go to Silver Wheaton, Fresnillo, and Industrias Penoles, all of which make up at least 10% of the total assets (see 5 Solid ETF Picks for Retirement).

From a cap perspective, large caps account for just 10% of assets, giving the fund a focus on small and micro cap securities. When taking a country look, Canada makes up roughly 60% of the assets, while Mexico (22%), and the U.S. (15%) round out the rest of the top three.

SIL is now up 26.8% in the past five days, easily crushing the broad market and other metal mining ETFs as well.

iShares MSCI Global Silver Miners ETF (SLVP)

This relatively new product is somewhat of a competitor to SIL, though it remains unpopular compared to its main foe. The product offers investors exposure to a basket of silver mining companies throughout the world, holding roughly 30 stocks in its basket.

Large caps make up a much bigger portion of this product when compared to SIL, accounting for roughly one third of the portfolio. Small and micro caps still account for roughly half the total, while the same countries—Canada, Mexico, and the U.S.—make up the vast majority of the assets from a national perspective (see 3 ETF Strategies for Long Term Success).

This product has moved higher by about 19.2% in the past five days, also performing quite well when compared to broader metal mining peers.

Pure Funds ISE Junior Silver ETF (SILJ)

For a true small cap play on the silver mining space, investors now have SILJ. This relatively new fund hasn’t attracted a whole lot of interest from investors, but could be a fresh way to target securities that are usually left out of investor portfolios.

The fund tracks the ISE Junior Silver Small Cap Miners/Explorers Index, holdings about 30 companies in total. The product stays true to its ‘junior’ focus, as it doesn’t have any assets in securities that are mid caps or larger.

This product has added about 15.9% in the past five days, though it should be noted that volume remains extremely light.

Leveraged Options

Unfortunately, there aren’t any leveraged silver mining ETFs currently on the market. However, there are a few leveraged products for exposure to the underlying metal, and as you can imagine these have done quite well lately.

These include the ProShares Ultra Silver ETF (AGQ) and the VelocityShares 3x Long Silver ETN (USLV). AGQ offers investors 2x daily resetting exposure to silver bullion, while USLV gives 3x daily resetting exposure to the same metal.

Given the run of silver over the past few days, these two products have been huge beneficiaries of the trend, as both have surged to incredible heights. In fact, AGQ has added 23.7% in the past five days, while the triple leveraged product USLV has moved higher by 37.1% in the same period.

Bottom Line

It has been a great week to be in the mining space, as precious metal prices have stabilized in recent sessions. This has led to great trading for miners, who often act as leveraged plays on the underlying commodities.

While many investors have focused in on gold miners for the most part, arguably the real winners have been in silver. This space has surged to near-term highs and should the current trend continue in the space, we could see further gains in this corner of the market in days to come as well.

This article is brought to you courtesy of Eric Dutram.

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