Broad commodities are showing an impressive comeback after a steep fall earlier this year, and have caught enough investor interest of late. This is particularly true given recent moves in the space, as many metals have been rebounding from their lows or moving higher.
In the precious metal world, gold climbed 13% from its June low while silver gained 14% last week, marking the biggest weekly gain in almost five years. Base metals like copper, aluminum, and zinc are also trending upwards.
This surge in broad metals was driven by the perception that China is improving slowly and the Euro zone has emerged out of recession, while the U.S. is now growing at a faster clip. Meanwhile, lower chances of the Fed scaling back its monetary stimulus sometime soon has led to a decline in the dollar that is boosting demand for the metals.
Further, investors are now turning their focus on commodities rather than equities as they think equity markets look expensive at current levels and could come down in the short term given uncertainty about the Fed’s tapering (read: 2 Commodity ETFs Offering Investors Sweet Returns).
This turnaround has finally shifted perception on the mining space, leading to some strong performances in the broad commodity world. Given this broad rally, the miners, who are often leveraged to the price changes of their underlying commodities, have started gaining traction.
In fact, many mining ETFs are actually spiking lately, with several up more than 5% over the past three weeks. Though investors continue to focus on the popular funds in the space, several overlooked ETFs have performed well in the past weeks while volume remained light.
Below, we have highlighted three mining ETFs, which are not only in green, but have delivered nearly double-digit returns so far this month. Any of these could be excellent plays for investors seeking to ride this sudden move in the metal mining space even higher:
Global X Junior Miners ETF (JUNR)
This ETF provides broad exposure to small cap firms in the mining world from across the globe by tracking the Solactive Global Junior Miners Index. The product has amassed only $5.3 million in AUM while it charges 69 bps in fees per year.
With holdings of 92 securities in its basket, the fund is widely spread across each security as none of these accounts for more than 3.6% share. Precious metals enjoy the top position in the basket comprising roughly three-fifths of the assets. The rest goes to broad metals and minerals, coal and alternative energy, steel, and aluminum (read: The Guide to Broad Metals and Mining ETFs).
In terms of national breakdown, Canada and the U.S. take the top spots with 36.25% and 21.53% of assets, respectively. Australia (19.32%), China (4.88%) and Japan (3.61%) round out the top five, suggesting that many countries have sizable chunks in the portfolio.
Though JUNR is down 33.7% year-to-date, it added 8% this month alone.