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The market is breathing new life into miner stocks, and with exchange traded funds, investors can take a different approach to the mining sector.

Precious metals miner ETFs have been among the worst performing funds year-to-date; however, the recent turn around in precious metals has fueled a huge surge in miner stocks, especially for small-cap silver miners.

The PureFunds ISE Junior Silver ETF (NYSEARCA:SILJ) jumped 26.5% over the past month, but the ETF is still down 33.8% year-to-date. Meanwhile, the iShares Silver Trust (NYSEARCA:SLV), which holds a basket of physical silver, has increased 18.3% over the last month.

SILJ country allocations include Canada 76%, U.S. 20%, Australia 3% and U.K. 1%. Top holdings include Fortuna Silver Mines 11.3%, Endeavour Silver Copr 10.3% and MAG Silver Corp 9.4%.

Silver has shown greater volatility compared to gold, but the greater risk can come with higher returns. Additionally, silver mining companies experience greater swings, compared to the physical metal, but they have generated robust returns, and small-cap miners can potentially outpace large-caps. Chanin points out that SILJ has gained almost 50% since its June low.

"Investors can find more bang for your buck in silver," Andrew Chanin, co-founder and chief operating officer of PureFunds, said in a phone interview. "Silver provides a higher beta play."

Chanin also pointed out that silver demand for both as investment and industrial input is rising. Specifically, demand for U.S. silver eagle coins is on a record pace of sales. Silver is also used as an efficient heat and electricity conductor. The growing solar industry has also bolstered silver prices. Additionally, silver has many medical uses, including anti-microbial, surgical appliances and biotechnology applications.

Investors can also take on metals and mining sector ETFs, but PureFunds has created the PureFunds ISE Mining Services ETF (NYSEARCA:MSXX) to target service providers for the growing mining industry.

Country allocations include Australia 53%, US 14%, Canada 9%, Sweden 8%, Chile 6%, Hong Kong 5%, Indonesia 2%, UK 2% and South Africa 1%. Top holdings include Mineral Resources 8.3%, Atlas Copco 7.8% and Monadelphous Group 7.3%.

Chanin explained how mining companies have come and gone, but mining services providers, or "the guys selling the picks and shovels," are still strong. Investors can liken the miner service and equipment space to miner stocks with energy service and equipment space to energy stocks.

Moreover, MSXX comes with a 4.89% 30-day SEC yield.

"The miner service and equipment ETF is the best way to get a dividend play on the mining space," Chanin added. "The ETF provides a high yield play with exposure to metals and mining space."

The money manager also provides the only diamond mining related ETF, the PureFunds ISE Diamond/Gemstone ETF (NYSEARCA:GEMS). GEMS is up 7.7% over the past month.

Country allocations include UK 28%, Hong Kong 25%, Canada 20%, US 15% and Japan 7%. Top holdings include Chow Tai Fook Jewelry 8.6%, Petra Diamonds 8.0% and Anglo American 8.0%.

Potential investors in these funds should be aware that they have low assets under management and may exhibit wide bid/ask spreads.

Max Chen contributed to this article.

Full disclosure: Tom Lydon's clients own SLV.

Source: PureFunds ETFs Track A Different Vein In Mining Industry