ETF Spotlight: Metals and Mining

October 28th at 4:07pm by Tom Lydon

ETF Spotlight on SPDR S&P Metals & Mining (NYSEArca: XME), part of an ongoing series.

Assets: $928.3 million.

Objective: The SPDR S&P Metals and Mining fund tries to reflect the performance of the S&P Metals and Mining Select Industry Index, which holds metals and mining sub-industry stocks from the S&P Total Market Index.

Holdings: Top holdings include: Worthington Inds Inc (NYS: WOR) 3.39%, Schnitzer Stl Inds (NasdaqGS: SCHN) 3.32%, Carpenter Technology Corp. (NYSE: CRS) 3.22%, Rti Intl Metals Inc (NYSE: RTI) 3.17% and Nucor Corp. (NYSE: NUE) 3.15%.

What You Should Know:

  • State Street Global Advisors sponsors the fund.
  • XME has an expense ratio of 0.35%.
  • Sub-sector allocations include: Steel 34.86%, Diversified Metals & Mining 24.16%, Coal & Consumable Fuels 17.81%, Gold 9.51%, Aluminum 7.20%, Precious Metals & Minerals 6.45%.
  • The fund is up 16.46% over the last month, down 14.97% over the past three months and down 16.45% year-to-date.
  • “This fund’s exposure exhibits significantly greater leverage to mined-commodity prices than direct physical ownership,” Abraham Bailin, Morningstar analyst, said. “If commodity prices fail to rise, or if mining costs outpace increasing commodity prices, this funds constituents will suffer.”
  • “Firms shoulder heavy production costs and court high operational and geopolitical risks,” Bailin added in a profile of the ETF. “Only the lowest cost producers with economies of scale, or those wielding a diversified portfolio of metals and mines, are able to earn back their cost of capital.”

The Latest News:

  • XME recently crossed over its 50-day exponential moving average.
  • Basic materials stocks led the market Friday, up a little more than 3% overall.
  • Industrial metals and mining stocks gained on higher risk appetite after Europe unveiled its new beefier rescue plan.
  • Notable movers on Friday included Stillwater Mining (NYSE: SWC), whose shares jumped more than 26% Friday after the company revealed significantly higher profit and earnings, WSJ.com reports.

SPDR S&P Metals & Mining

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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