We have spoken about the sometimes extreme intraday volatility that the Precious Metals as well as related Mining companies have experienced thus far in 2014, with very choppy charts in benchmark ETFs like SLV (iShares Silver, Expense Ratio 0.50%) and GLD (SPDR Gold Trust, Expense Ratio 0.40%) in the past few weeks.
SLV actually saw an uptick in options activity yesterday which caught our eye, but today we would like to focus on Silver Miners as opposed to the physical metal itself. SIL (Global X Silver Miners, Expense Ratio 0.65%) is the largest ETF in this space with about $203 million in assets under management, averaging about 163,000 shares a day, as the other two funds in the space are considerably smaller in size (SLVP (iShares MSCI Global Silver Miners, Expense Ratio 0.39%, has $7.79 million in assets under management while the fledgling SILJ (PureFunds ISE Junior Silver (Small Cap Miners/Explorers), Expense Ratio 0.69%) only has $1.5 million in AUM, which looks like it may be seed capital.
To put things in perspective, SIL debuted in 2010, so the concept of Silver Miner ETFs is still fairly new to the ETF marketplace, but most everyone knows the wild success that Gold Miner equity based ETFs have had in terms of raising assets since they debuted (notably GDX (Market Vectors Gold Miners, Expense Ratio 0.52%) having attracted an impressive $4.2 billion in AUM since in 2006).
SIL has a healthy slice of Small, Micro, and Mid Cap exposure, of about 41%, 13%, and 11.7% respectively, so expect the volatility that comes with such territory. Additionally, the portfolio has very heavy international exposure, with 57.65% of the exposure residing in Canada and an additional 21.58% in Mexico (U.S. equity exposure is about 15.74%).
Top names in the portfolio are SLW (12.22%), Fresnillo PLC (11.21%), Industrias S.A.B. de CV (10.37%), Tahoe Resources Inc. (5.56%), and Coeur Mining Inc. (5.33%). SLVP looks somewhat similar to SIL in that 55.21% of the portfolio lies in Canada and 15.98% in Mexico, with 12.29% devoted to U.S. equities and a 6.61% to Peru. SLW is also the top holding in SLVP, but it carries a much higher weighting, at 21.04% of the portfolio.
Global X Silvers Miners ETF