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PureFunds™ ISE Junior Silver ETF – Access to Silver Exploration and Mining Companies

PureFunds™ ISE Junior Silver ETF

Overview

PureFunds® ISE Junior Silver ETF (NYSEARCA:SILJ) is an exchange-traded fund (ETF) focused on bringing silver exploration and mining exposure of small cap companies to institutional and retail investors.

PureFunds® ISE Junior Silver ETF is the first and only pure-play ETF that exclusively aims to hold silver explorers and junior silver producers. The Fund concept was created by PureFunds®, a research and business management firm, that acts as the Business Manager to the PureFunds ISE Junior Silver ETF.

Founders Andrew Chanin and Paul Zimnisky launched PureFunds in late November 2012. Andrew Chanin started at Kellogg Group on the floor of the American Stock Exchange and the New York Stock Exchange’s electronic platform ARCA, trading international and global equity funds, specializing in the natural resource space.

In an interview with The Gold Report, Andrew says, “People who are fans of the junior mining space are there because they seek that higher beta play. If investors believe silver prices are on the rise, we thought the best vehicle would be giving them access to a basket of junior silver stocks. But the movement, the volatility and the risk-reward profiles weren’t the only reasons that we were interested in the junior space.”

PureFunds® ISE Junior Silver ETF

PureFunds® ISE Junior Silver ETF, the very first and only ETF to focus on global companies in the junior silver space exclusively, tracks the ISE Junior Silver Index. The Fund provides investors with the opportunity to focus on small-cap companies active in silver mining, exploration and production.

Principal Investment Strategies

PureFunds® uses a replication strategy that invests at least 80% of its total assets in the component securities of the Underlying Index and in American Depositary Receipts and Global Depositary Receipts based on the component securities in the Underlying Index. The Fund may invest up to 20% of its total assets in securities that are not in the Fund’s Underlying Index to the extent that the Adviser believes such investments should help the Fund’s overall portfolio track the Underlying Index.

Top Ten Holdings as of January 3, 2014*:

Endeavour Silver Corp 11.99%
Silvercorp Metal Inc 11.83%
Fortuna Silver Mines Inc 11.56%
MAG Silver Corp 10.58%
Silvercrest Mines Inc 5.13%
Mandalay Resource Corp 4.89%
Trevali Mining Corp 4.48%
Bear Creek Mining Corp 4.47%
Alexco Resource Corp 4.07%
Golden Minerals Co 3.34%

* Fund holdings and allocations are subject to change at any time and should not be interpreted as an offer of these securites.

PureFunds_Companies

Junior Silver Companies included in the portfolio are both pure play and non pure play companies that are first screened for liquidity and then weighted according to a modified market capitalization based on the percentage of company revenues generated from the Silver Sub-Industry. Companies selected in the portfolio are revisited every six months.

As of December 31, 2013, performance was reported as follows:

AVERAGE ANNUALIZED QUARTER ENDING 12/31/13 1 MONTH 3 MONTH YTD 1 YEAR SINCE INCEPTION 11/29/2012
Market Price -3.73% -20.86% -53.54% -53.54 -50.26%
NAV -5.07% -19.91% -53.06% -53.06 -50.07%

Performance is annualized for periods greater than 1 year. Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Funds may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 877-756-PURE. The fund’s expense ratio is 0.69%. 

Partners

Index Provider to the Funds: The International Securities Exchange (ISE) operates a leading U.S. options exchange and offers options trading on over 2,000 underlying equity, ETF, index, and FX products. ISE has a portfolio of over 25 proprietary indexes, based on a diverse range of asset classes, fast growing industries and emerging technologies.

Listing Venue for the Funds: NYSE Arca is NYSE Euronext’s premier listing venue for Exchange Traded Products. Its unique market structure, state of the art electronic trading platform and innovative solutions, drives its business around the world. As a result, sponsors have chosen to list over 1,300 of their Exchange Traded Products on NYSE Arca.

Advisor for the Funds: Factor Advisors, LLC is a wholly owned subsidiary of GENCAP Ventures, LLC (GENCAP), a leading Exchange Traded Funds (ETF) products and services company. GENCAP offers a full range of ETF services to the investment management community through it’s subsidiaries: Factor Advisors, LLC, Factor Capital Management, LLC, ETF Service Providers, LLC and GENCAP Strategies, LLC. The services provided include product management, ETF wholesaling and marketing.

Definitions

Beta: A measure of a security’s volatility.  A beta greater than one signifies a security that is more volatile than the market, while a beta less than one signifies a security less volatile than the market.

ISE Junior Silver™ Index: This index, created by the International Securities Exchange provides a benchmark for investors interested in tracking public, small-cap companies that are active in Silver Mining based on revenue analysis of those companies.  An investment cannot be made directly in an index.

Modified Market Capitalization: A method of weighting components in an index based on the value of the underlying companies with additional factors taken into consideration whereas the value of each company is not the sole consideration applied to index weighting methodology.

IOPV: Indicative Optimized Portfolio Value is a calculation of the of a fund’s underlying securities and cash updated approximately every 15 seconds to give an approximate value of the fund on a per share basis.

ISIN: International Securities Idenfication Number is a unique code the represents an individual securities issue.

Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds’ prospectus, which may be obtained by calling 1-877-756-PURE (1.877.756.7873), or by visiting www.PureETFs.com. Read the prospectus carefully before investing.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV) , may trade at a premium or discount to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual issuer volatility than a diversified fund. Funds that are less diversified across countries or geographic regions are generally riskier than more geographically diversified funds and risks associated with such countries or geographic regions may negatively affect a Fund. Investments in small-and medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. The PureFunds ISE Junior Silver ETF is subject to risks associated with the worldwide price of silver and the costs of extraction and production. Worldwide silver prices may fluctuate substantially over short periods of time, so the Fund’s share price may be more volatile than other types of economic conditions, tax treatment, government regulation and intervention, and world events in the regions in which the companies operation. Several foreign countries have begun a process of privatizing certain entities and industries. Privatized entities may lose money or be renationalized. The Fund invests in some economies that are heavily dependent upon trading with key partners. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. The Fund’s return may not match or achieve a high degree of correlation with the return of the ISE Junior Silver (Small Cap Miners/Explorers)™ Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the ISE Junior Silver (Small Cap Miners/Explorers)™ Index.

The PureFunds ISE Junior Silver ETF is distributed by Quasar Distributors, LLC. Quasar is not affiliated with Factor Advisors, LLC or any of its affiliates, the NYSE or ISE.