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Discussion Starter #1 (Edited)
Any Mining Experts Here ?

trying to compare BMO ETF ZMT to Claymore ETF CMW ..

zmt is equal weighted base metals and the claymore is by market size

there is a lot of overlap, almost all of the zmt are in the cmw but in much smaller weightings

the zmt gives you much smaller holdings of the heavyweights

want to have some exposure to mining but not sure which way to go

any opinions from those familiar with either of these ?
 

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ZMT would be the better choice simply based on fund composition. That answers your question, but you still need to investigate these funds in depth before choosing to actually invest in one. You need to find the reasons to obtain my answer, and be aware of the multitude of pitfalls associated with each investment option.

Disclaimer: I answered this based solely on information you posted. I have spent exactly zero time investigating your investment considerations.
 

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You may also consider volume. And it looks like CMW has a much higher volume then ZMT making it easier to get in and out of the ETF.
 

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Again , without doing any real research myself , just going by Google charts , CMW has a history of paying dividends , so they may do so again , I didn't see any dividends in ZMT.

I think a good mining ETF should pay out some of the dividends they receive , I basically buy only income producing investments these days.
 

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Discussion Starter #5
right, cmw is more established and has better trading volume so would be easier to buy and sell

i am wanting some exposure to this sector because like every schmuck i am think "golly, i better have some commodities", certainly if the we see this currency debasement continue worldwide they would be a good stocks to have as a hedge against inflation

cmw seems to give you more of the big buys which means it's somewhat more established but zmt gives a bit more upside because you have more juniors i guess

i am thinking maybe i will split and buy a little of each as i have done with xdv and cdz

all of these are stocks that i plan to hold, not trade
 

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"i am thinking maybe i will split and buy a little of each as i have done with xdv and cdz"

I don't understand this at all. What's your rationale, if you don't mind me asking?
 

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Discussion Starter #8
i have seen many commentators recommend that if you can't choose between cdz and xdv to just buy both which gives you exposure to both parts of the spectrum consistent payers and dividend increasers

the situation with cmw and zmt seems similar, you have large companies dominating a huge part of one etf and on the other you have an equal weighted set of companies, one gives you more exposure to smaller companies the other gives more exposure to the big guys

if all am incurring is the transaction cost to buy both, then an equal purchase gives me a broad based holdings in that sector

how do you see it ?

What the heck is Miningh?
a misspelling by a tired poster :)
 

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fatcat: Their holdings and strategy are so similar that it doesn't seem like it would make a lot of sense to hold both. It's fine if you want to, but it sounds like the other person who has 5 bond funds. More funds does not necessarily deliver better diversification.
 

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oayrlh it's a fdah to wetrih like dey is portin dere ballbase pacsh wackabrds.
 

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Discussion Starter #12
man, i hate it when i ask people for help and no one answers so i am forced to actually do my own research instead of letting others do it for me :D

ok zmt is a base metal etf (iron, nickel, lead and zinc, copper) which means it excludes precious metals and thus you don't see gold or silver miners on there to any real degree (i believe there is a lot of crossover in mining in so far as miners will bring out whatever is in front of them even if it isn't what they are looking for) so you will not get exposure to the precious metals in zmt, just the boring old base metals

cmw is much more broad based index with 165 companies vs. 52 for zmt, there is a lot of overlap obviously and it has a lot of gold and silver miners in it who are represented at the very top of the index (barrick, goldcorp and newmont for example)

over 52% of cmw is not even represented in zmt consisting mainly of gold producers and a lot of billiton

market cap is similar (though zmt is only a little over a year old vs cmw 2.5 years) but zmt has almost twice the daily trading volume

so you could certainly own equal weights of each which give large market cap miners like billiton and big gold producers and then zmt would give you equal weighting of many different base metal producers .... zmt keeps you away from gold and silver but into copper

on their own they look like very different products
 

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You won't find either of these ETF's in any classic 'Couch Potato' model portfolios. That is because it is recommended that you only hold broad-based ETF's like XIU etc.

That said, I do hold a 5 percent position in the RBC Global Precious Metals Fund and so who am I to say?!

Generally, the broader-based the investment, the more diversification and less volatility you end up with.

Of the choices given, my recommendation would be CMW but nobody knows where gold is headed and, when it corrects, it could be quite significant and so the volatility factor comes into play again.

You pays your money and you takes your chances.:eek:
 

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Discussion Starter #14
That is because it is recommended that you only hold broad-based ETF's like XIU etc.
right, i guess it depends on who the "it" is .... :)

i am in the camp that believes that at least for the moment, we are in an "all the old rules don't apply" situation

i wouldn't load up on the metals by any means but it seems clear that if we see a large amount of worldwide QE (like the japanese just did and the us is going to do) then mining and metals stocks will absolutely benefit

cmw is broad based but if you want to get into base metals zmt could arguably be even more broad based since it gives an equal shot at many players
 

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cat you have a good idea & what's more you seem able although reluctant to do your own research, so these aspects merit reward.

on the negative side & just ottomh it's a bit late for you to be arriving at the mining banquet. The first sitting has already departed & the waiters are changing the place settings for the second sitting, which you could join, although the exact hour of its commencment isn't clear yet. The long perspective is that it's going to be an all-night-all-day affair at the banquet, though. Fortunately the kitchens are loaded.

it's never a good idea to rely on a fund's advertising imho. Or a banquet's. You have to study the individual items on the menu. Like, a quick glance shows that bmo's base metals etf holds a significant exposure to gold & silver in spite of what their advertisers are saying. Take ivanhoe, their biggest holding. Its main claim to fame is the giant Oyu Tolgoi property in mongolia. This is copper/gold, but it's the gold that's garnered all the attention for more than a decade. IVN will gradually withdraw from mongolia in favour of its partner rio tinto; but at the present moment i'd class ivn as a gold producer, not a base metal producer.

mercator, too, (another bmo top holding) has a 100% gold and silver play in chihuahua mexico.

as a matter of fact, copper itself should never be classed among the base metals imho. It's a semi-precious. Known as doctor copper because it's an economic bell-wether, this beautiful gleaming red-gold metal forms a class of its own.

more trivia. Took a quick look at the claymore fund's holdings. Now that's a sensible, well-rounded diversified list that's suitable for a startup investor imho. Some good picks in there. Personally i'd choose this one alone, i would not buy the bmo item.
 

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Discussion Starter #17
pie, thanks for that clarification, i got my definition from wikipedia and have included the whole entry below as it is interesting ... copper seems to be a kind of intermediate metal not precious nor quite base in that it oxidizes easily but doesn't react to hydrochloric acid

i wonder how specific the mining industry is for machinery and production nd so on, if gold keeps rising, will we see miners that are going for nickel decide they like gold better of maybe switch to rare earths .. hard to know

right, as you say, the first course has been served, both etf's are at 52 week highs, prudence would say to wait ...

i heard once that joe kennedy got out of the stock market before the crash because he got a stock tip from his shoeshine boy

we are in an analogous situation now with commodities and the metals

In chemistry, the term base metal is used informally to refer to a metal that oxidizes or corrodes relatively easily, and reacts variably with diluted hydrochloric acid (HCl) to form hydrogen. Examples include iron, nickel, lead and zinc. Copper is considered a base metal as it oxidizes relatively easily, although it does not react with HCl.

Base is used in the sense of low-born, in opposition to noble or precious metal[1]. In alchemy, a base metal was a common and inexpensive metal, as opposed to precious metals, mainly gold and silver. A long-time goal of the alchemists was the transmutation of base metal into precious metal.

In numismatics, coins used to derive their value primarily from the precious metal content. Most modern currencies are fiat currency, allowing the coins to be made of base metal.[citation needed]

In mining and economics, base metals refers to industrial non-ferrous metals excluding precious metals. These include copper, lead, nickel and zinc.[2] The U.S. Customs and Border Protection is more inclusive in its definition. It includes, in addition to the four above, iron and steel, aluminium, tin, tungsten, molybdenum, tantalum, magnesium, cobalt, bismuth, cadmium, titanium, zirconium, antimony, manganese, beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium, rhenium and thallium.[3]
 

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pie, thanks for that clarification, i got my definition from wikipedia ...
Someone is getting sidetracked from the task at hand, focus man focus. ;)

Wth do you mean when you say market cap is similar but one fund is one year old and the other two and a half? You may want to investopedia market cap asap.
 

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right, i guess it depends on who the "it" is .... :)

i am in the camp that believes that at least for the moment, we are in an "all the old rules don't apply" situation

i wouldn't load up on the metals by any means but it seems clear that if we see a large amount of worldwide QE (like the japanese just did and the us is going to do) then mining and metals stocks will absolutely benefit

cmw is broad based but if you want to get into base metals zmt could arguably be even more broad based since it gives an equal shot at many players
Are you sure you want to lump yourself into the dumba$$ camp?? The way this is heading I'm going to end up perusing the holdings of each to make an educated decision.
:p
 
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