SIL and COPX: Global X Launches ETFs Tracking Silver and Copper Miners

April 20, 2010 by  
Filed under Commentary, ETF IPOs (New ETFs), ETFs

Global X launched new ETFs today (4/20/10) targeting silver and copper miners around the globe.  Global X Silver Miners ETF (SIL) and Global X Copper Miners ETF (COPX) become the ninth and tenth products from Global X, joining Global X/InterBolsa FTSE Colombia 20 ETF (GXG), Global X FTSE Nordic 30 ETF (GXF), and the six Global X China Sector ETFs.

The new funds each have an expense ratio of 0.65% and aim to replicate indexes of global companies involved in the silver and copper mining industries.  The underlying Solactive Indexes were created by Structured Solutions.

Global X Silver Miners ETF (SIL) (fund summary) will seek to replicate the performance of the global silver mining industry.  The underlying index uses a multi-tiered capped weighting methodology.  The percentage weighting of each constituent above 10% is increased or capped at 12%; any excess weight is allocated proportionally to all other constituents and then capped again at 4.75%. The remaining excess is then allocated proportionally to all non-capped constituents.

SIL presently has 25 holdings.   The top four capped at 12% are: Industrias Penoles SAB de CV, Silver Wheaton Corp, Pan American Silver Corp, and Fresnillo Plc.  Five other stocks are capped at 4.75% each, and the remaining 16 holdings range between 0.3% and 4.2%.  The country breakdown is Canada 58%, Mexico 24%, U.S. 10%, Russia 4%, and Peru 4%.  Additional information is available in the SIL fact sheet (pdf).

While numerous ETFs track silver bullion prices, SIL is the first to track the stocks of silver miners.

Global X Copper Miners ETF (COPX) (fund summary) will seek to replicate the performance of the global copper mining industry.  The underlying index uses a capped weighting methodology in which the percentage weighting of each constituent capped at 4.75%. The excess weight is allocated proportionally to all non-capped constituents.

There are 30 holdings in COPX, 16 of which are capped at 4.75%.  The country breakdown is Canada 44%, Britain 14%, Australia 12%, U.S. 10%, Poland 5%, Mexico 5%, Russia 4%, and South Africa 1%.  Additional information is available in the COPX fact sheet (pdf).

COPX will face direct competition from First Trust ISE Global Copper Index Fund (CU), which was launched on March 12 and has an expense ratio of 0.70%.

The prospectus dated April 19, 2010 also includes the Global X Gold Miners ETF and Global X Platinum Miners ETF.  There is no indication when these additional products will be listed.

Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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