ETF Spotlight: Metals And Mining

Oct.30.11 | About: SPDR S&P (XME)

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ETF Spotlight on

SPDR S&P Metals & Mining (NYSEArca: XME)

, part of an ongoing series.

Assets: $928.3 million.

Objective: The SPDR S&P Metals and Mining fund tries to reflect the performance of the S&P Metals and Mining Select Industry Index, which holds metals and mining sub-industry stocks from the S&P Total Market Index.

Holdings: Top holdings include: Worthington Inds Inc (NYS: WOR) 3.39%, Schnitzer Stl Inds (NasdaqGS: SCHN) 3.32%, Carpenter Technology Corp. (NYSE: CRS) 3.22%, Rti Intl Metals Inc (NYSE: RTI) 3.17% and Nucor Corp. (NYSE: NUE) 3.15%.

What You Should Know:

  • State Street Global Advisors sponsors the fund.
  • XME has an expense ratio of 0.35%.
  • Sub-sector allocations include: Steel 34.86%, Diversified Metals & Mining 24.16%, Coal & Consumable Fuels 17.81%, Gold 9.51%, Aluminum 7.20%, Precious Metals & Minerals 6.45%.
  • The fund is up 16.46% over the last month, down 14.97% over the past three months and down 16.45% year-to-date.
  • “This fund’s exposure exhibits significantly greater leverage to mined-commodity prices than direct physical ownership,” Abraham Bailin, Morningstar analyst, said. “If commodity prices fail to rise, or if mining costs outpace increasing commodity prices, this funds constituents will suffer.”
  • “Firms shoulder heavy production costs and court high operational and geopolitical risks,” Bailin added in a profile of the ETF. “Only the lowest cost producers with economies of scale, or those wielding a diversified portfolio of metals and mines, are able to earn back their cost of capital.”

The Latest News:

  • XME recently crossed over its 50-day exponential moving average.
  • Basic materials stocks led the market Friday, up a little more than 3% overall.
  • Industrial metals and mining stocks gained on higher risk appetite after Europe unveiled its new beefier rescue plan.
  • Notable movers on Friday included Stillwater Mining (NYSE: SWC), whose shares jumped more than 26% Friday after the company revealed significantly higher profit and earnings, WSJ.com reports.

SPDR S&P Metals & Mining

Max Chen contributed to this article.