ETFs are investment funds that are traded on stock exchanges in a manner similar to stocks. The ETF holds assets like stocks and bonds and it trades at nearly the same value as the net asset value of the assets it contains. An ETF usually tracks an index and is attractive to investors due to its low cost, tax-friendly nature, and features similar to stocks. Mining ETFs own shares of companies engaged in getting minerals and metals out of the ground.
The Market Vectors Gold Miners Fund contains shares of 30 companies engaged in mining silver and gold ore. It tracks the Amex Gold Miners Index and the fund is approximately 1.5 times as volatile as the performance of the S&P 500. The Spider S&P Metals and Mining ETF is made up of 25 companies engaged in materials and energy acquisition. It includes companies engaged in steel, coal, zinc, and palladium extraction and production. The return on equity of this fund is almost 30 percent, making it very attractive to investors.
Market Vectors-Coal ETF targets the worldwide coal industry and tracks the Stowe Coal Index. Most of the companies represented in the fund are based in untapped and emerging markets such as Indonesia and Thailand. Investment in this fund is a quick way to capitalize on a rising demand for coal.
The iShares MSCI Chile Index Fund offers investors exposure to copper. Almost one-third of the global production of copper occurs in Chile. The iShares MSCI South Africa Index is comprised of companies that deal with energy, metals, commodities, and materials. Fifty percent of its holdings are in the energy and materials sector and mining companies represent four of the top ten holdings.
There are several other ETFs that hold shares of companies engaged in natural resources, metals, and mining. Investors should research these and those mentioned above to find the best fund in which to invest money. A large part of every economy is dependent on the activities undertaken by the mining industry. This makes mining ETFs a valuable addition to the investment portfolio.
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