For investors seeking momentum, ETFMG Prime Junior Silver ETF (SILJ - Free Report) is probably on radar. The fund just hit a 52-week high and is up 54.8% from its 52-week low price of $6.77/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
SILJ in Focus
The fund follows the Prime Junior Silver Miners & Explorers Index and holds 32 stocks. It has company-specific concentration risks with the top three holdings occupying about 37% of the basket (see: all Materials ETFs here).
Why the Move?
Precious metal investing has been an area to watch lately as investors are flocking to safe havens amid deepening trade dispute between the United States and China that has raised concerns about global economic growth. Also, China retaliated with fresh tariff threats by announcing a yuan devaluation. All these factors make safe-haven metals like gold and silver prudent investment options. Since mining stocks often act as leveraged plays of the underlying metal, this silver mining ETF had every reason to outperform in the present shaky market environment.
More Gains Ahead?
If the markets remain edgy throughout the month on renewed trade tensions and the resultant retaliation, there could be a rally in the fund. The fund has a positive weighted alpha of 18.40, suggesting a positive momentum.
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