Diamonds are a girl’s best friend, but can they make the grade with investors? As developing nations see their middle classes grow in ranks, a diamond exchange traded fund (ETF) may be an appealing idea. For now, here are two ways to get your diamond exposure.
The diamond market is very volatile. Since global diamond production is declining and prospects of finding new mines are slim, this may lead to a solid reason that a diamond ETF may be just what the gem market needs. If you can’t wait for a diamond ETF, there are indirect ways to get diamond exposure:
- iShares S&P Global Materials (NYSEArca: MXI)
- iShares MSCI Australia Index (NYSEArca: EWA)
Another aspect that the diamond industry has going for it is the widening middle class in China, India and other emerging markets. Kevin Grewal for The Street explains that some analysts and diamond experts suggest that valuations of diamond stocks appear to be relatively cheap. [Where Is that Diamond ETF?]
Meanwhile, the rough diamond market is showing signs of rebounding and if investors are cooperative in financing diamond mining and exploration, the industry could begin to sparkle.
For more stories about diamonds, visit our diamonds category.
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.