6 Top Performing Stocks Of The Best ETF Of 2016

Precious metals like gold and silver enjoyed a bullish run this year as global uncertainty, Brexit concerns, and financial market instability bolstered demand for precious metals, especially in the first half of 2016.

However, gold lost its luster in the second half on a strong greenback and the prospect of rate hike while silver continued its solid run on an uptick in global manufacturing and industrial activity as well as strong growth in the U.S. Notably, silver is used in a wide range of industrial applications. About 50% of the metal’s total demand comes from industrial applications while 30% comes from jewelry/silverware/coins and medal manufacturers.

Industrial demand for silver is on the rise and expected to continue next year, thanks to the ongoing growth in the global solar PV industry, rebound in global computer shipments, as well as new sources of demand for sensors used in the Internet of Things and OLED lighting. While demand is increasing, supply of the metal is expected to decline over the next several years. As per the GFMS Thomson Reuters, global silver mining production, which peaked in 2015, is expected to decline over the next several years.

Further, Trump is acting as a wild card for the grey metal lately given his promise to revive U.S. manufacturing and spend big time on infrastructure, rebuilding highways, bridges, hospital and many others. Added to the bullishness is the inflationary pressure in the U.S. and China that has raised the metal’s appeal as a hedge against inflation.

Acting as leveraged plays on underlying metal prices, metal miners tend to experience huge gains compared to their bullion cousins in a rising metal market. As a result, PureFunds ISE Junior Silver ETF (SILJ - Free Report) topped the list of the best performing ETFs of 2016, delivering whopping returns of about 133.1%.

Let’s take a closer look at the fundamentals of SILJ.

SILJ in Focus

This product provides a true small cap play on the silver mining space by tracking the ISE Junior Silver (Small Cap Miners/Explorers) Index. Holding 24 stocks in its basket, the fund is heavily concentrated on the top three firms that collectively make up for 39.8% of the assets while other firms hold less than 6% share. Canadian firms take the lion’s share at 81%, while U.S., Peru and United Kingdom take the reminder. The fund has managed assets worth $47.3 million and trades in a good volume of more than 225,000 shares a day. It charges 69 bps in annual fees.

Though almost all the stocks in the fund’s portfolio have delivered impressive returns, a few were the real stars having more than doubled this year. Below, we have highlighted those six best performing stocks in the ETF with their respective positions in the fund’s basket:

Top Performing Stocks of SILJ    

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Disclosure: None.

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