Launching Today: Global X Junior Miners ETF (JUNR)

This is the first ETF to provide access to junior mining companies globally, and adds diversification across resources by including companies involved in the production of coal, copper, gold, iron, nickel, silver, titanium and other materials.

The mining industry relies on junior mining companies to provide additional supply of key commodities – as large miners exhaust existing resources, junior miners are often poised to explore, develop, and monetize new mines to bring additional supply to the market.

There are opportunities to benefit from increased merger and acquisition (M&A) activity in the sector, as large mining companies look to acquisitions and partnerships as additional sources of supply and geographic expansion.

“Low interest rates, above-average metal prices, well-funded junior programs, and M&A potential driven by balance sheet strength of the major mining companies are positive underlying factors supporting the junior mining sector” (Canaccord Capital 2011).

In addition to traditional M&A activity from large industry players, more deal activity is expected from sovereign wealth funds, specialized private equity funds, large pension funds and other industrials like steelmakers and iron producers (PwC 2012).

We see value in junior miners at current valuations, particularly in an environment that could bring significant inflation over the next few years following massive global quantitative easing.