Opportunities in Mining and Metals ETFs

Includes: EMT, HAP, PPLT, SLX, XME
by: Tom Lydon

The metals and mining sector is presenting opportunity this year, and analysts are eyeing this positive trend for investors in shares and ETFs.

An analyst with HSBC recently noted what he sees are the top opportunities in the metals and mining sector. The Wall Street Transcript says that the places to go this year will likely be bulk commodities, such as iron ore, coal, thermal coal and metallurgical.

Coal looks especially good, says the analyst. China is rapidly consuming coal and iron ore, but they’re also two commodities in shortest supply. China’s demand is also such that coal can’t be produced quickly enough to cover it.

A similar rosy outlook for the platinum market is forecast, too. Last year, the group of six metals known as the platinum group metals (PGMs) outperformed gold and this year should bring more of the same, says Wong Eng Soon for the Business Times. A pick-up in global auto demand, tight mine supply growth and more demand for investment are seen as being the primary drivers of any gains.

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

  • Market Vectors RVE Hard Assets Prod ETF (NYSEArca: HAP)

  • Emerging Global Shares Metals & Mining (NYSEArca: EMT)

  • Market Vectors Steel (NYSEArca: SLX)

  • ETFS Platinum Shares (NYSEArca: PPLT)

For full disclosure, Tom Lydon’s clients own shares of XME.