The mining corner of the materials sector led the broad market rally in June with ETFMG Prime Junior Silver ETF (SILJ - Free Report) leading the way. It gained 21.5% last month.
The rally came on the back of signals by the Fed that it will cut interest rates to protect the economy from trade war threats and slowing global growth. This has pushed the dollar down against the basket of currencies and makes dollar-denominated assets attractive to foreign investors, raising the appeal for the grey metal (read: Best June for Stocks in Decades: 5 Best ETFs).
Additionally, industrial demand for silver is on the rise 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 IoT and OLED lighting. 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.
Further, the optimism surrounding a trade deal between the two largest countries to end a year-long tariff war supported the spike. Given this, silver registered its first monthly gain in five months.
Let’s take a closer look at the fundamentals of SILJ.
SILJ in Focus
This product provides direct exposure to the silver mining exploration and production industry by tracking the Prime Junior Silver Miners & Explorers Index. It holds 31 stocks in its basket with higher concentration on the top four firms. Canadian firms take the lion’s share at 69.7%, while the United States and Peru take the reminder. The fund has managed assets worth $58.7 million and trades in a good volume of more than 98,000 shares a day. It charges 69 bps in annual fees (see: all the Materials ETFs here).
Though most of the stocks in the fund’s portfolio delivered strong returns, a few have gained in double digits. Below we have highlighted the five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best Performing Stocks of SILJ
Coeur Mining Inc. (CDE - Free Report) : This company operates as a primary silver and gold producer with precious metals mines in the Americas. It gained about 51.8% in June. Coeur Mining currently has a Zacks Rank #4 (Sell) and VGM Score of F. The stock occupies the fifth position in the fund’s portfolio, making up for 5.1% share.
Hecla Mining Company (HL - Free Report) : This is a leading low-cost U.S. silver producer with operating mines in Alaska and Idaho, and is a growing gold producer with an operating mine in Quebec, Canada. It also delivered incredible returns of 37.4% last month. The stock has a Zacks Rank #3 (Hold) and VGM Score of F. Hecla Mining occupies the seventh position at 4.4% of HL. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Americas Silver Corporation (USAS - Free Report) : This silver mining company primarily owns and operates the Cosalá Operations in Sinaloa, Mexico and the Galena Mine Complex in Idaho. The stock rose about 35% last month. It currently carries a Zacks Rank #3 and has a VGM Score of F. USAS makes up for 2.1% of the total assets in the fund’s basket.
McEwen Mining Inc. (MUX - Free Report) : This company is primarily engaged in the precious metal mining business in continental United States. The stock makes up for 2.2% of the assets in the SILJ portfolio and gained 30.4% in June. McEwen Mining carries a Zacks Rank #4 and VGM Score of F (read: Top ETF Stories of 1H).
First Majestic Silver Corp. (AG - Free Report) : This company is engaged in the production, development, exploration, and acquisition of silver mines in Mexico. The stock rallied 30.1% in June and takes the top spot in SILJ portfolio with 12.54% allocation. First Majestic has a Zacks Rank #3 and VGM Score of C.
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