World’s Best Mining Investment
Claymore Global Mining ETF Tops Among International Mining Stocks
Jun 13, 2007
Mined commodities such as iron, gold, aluminum, uranium and diamonds are essential components of international trade.
The global mining industry has always involved substantial risks partly because commodity pricing is highly complex and volatile. Few international trade investors have deep enough pockets or sufficient time to actively manage a diversified portfolio of global mining stocks.
On June 12, 2007, new opportunities emerged when the Claymore S&P/TSX Global Mining Exchange Traded Fund (ETF) began trading on the Toronto Stock Exchange (TSX) under the symbol CMW.
Unlike a typical mining mutual fund, Claymore’s global mining ETF is professionally managed yet has a modest management expense fee of 0.55%. The underlying index is diversified with 107 of the world’s leading mining stocks. The average stock’s price-to-earnings (P/E) ratio is 9.9.
Diversified Mining Products
CMW represents an investment in a basket of 107 stocks, diversified into 5 mining product categories weighted as follows.
- Diversified Metals & Mining (e.g. iron, copper, nickel) … 60% of total Index (39 stocks)
- Gold … 18% (36 stocks)
- Aluminium … 11% (5 stocks)
- Coal & Consumable Fuels (e.g. coal, uranium) … 9% (16 stocks)
- Precious Metals & Minerals (e.g. silver, diamonds) … 2% (11 stocks)
Stocks in the mining index trade on different exchanges: 58% on the NYSE, 29% on the TSX and 13% on the NASDAQ.
Best-In-Class Mining Companies
The S&P/TSX Global Mining Index tracks proven mining companies with strong histories of growing revenues and earnings. The top 10 holdings for Claymore’s global mining ETF are shown below.
- BHP Billiton Ltd. (top producer of iron ore & coal) … 12.5% of total Index
- Anglo American PLC (top gold, platinum, diamond & coal miner) … 11.5%
- Rio Tinto Group (giant coal, iron, copper & uranium miner) … 9.4%
- BHP Billiton PLC (top aluminum, steel & manganese processor) … 8.1%
- Alcoa (leading aluminum producer) … 4.6%
- Companhia Vale Do Rio Doce (world’s #1 iron ore producer) … 4.2%
- Alcan (leading aluminum producer) … 4.1%
- Freeport McMoRan (giant gold, copper & silver miner) …3.9%
- Barrick Gold (world’s #1 gold producer) … 3.3%
- Cameco Corporation (world’s #1 uranium producer) … 2.5%
Diversified International Mining Stocks
CMW includes companies from different countries. Therefore, the global mining index is not fully dependent on the strength or weakness of a single country’s currency, exports or general economic health.
- United Kingdom … 29% of total Index
- Canada … 28%
- United States … 18%
- Australia … 14%
- Brazil … 4%
The top 5 countries represented in the Index account for 93% of total Index holdings. Other participants include South Africa (3.7% of total Index), China (1%) and Russia (0.6%).
Global demand for mined commodities continues to rise as the world’s population expands. In particular, CMW provides raw materials that will enable countries including BRIC (Brazil, Russia, India, China) to extend their robust rates of economic growth.
Sources For This Article
This article presents independent calculations and insights based on data drawn from the Investor Guide for Claymore’s Global Mining ETF as of May 31, 2007. Company overviews from hoovers.com were also consulted.
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