Five-Stock Portfolio #5: Junior Miner ETFs

Instant exposure to potential gold, silver, uranium, and copper 10-baggers

It’s easy to gain quick exposure to a promising sector: Just buy a few ETFs that specialize in those stocks, and you’re done (see Buy All The Big Gold/Silver Miners With A Mouse Click).

But are you really done? The big mining stock ETFs like GDX or SIL focus on the large-cap names in their sectors while ignoring the much greater number of smaller emerging players.

This latter group is obscure and volatile, which is to say high-risk/high potential reward, and — crucially — high effort. It’s hard to analyze all those juniors and explorers to separate the wheat from the chaff. So most investors either ignore emerging miners altogether or (much worse) buy them randomly based on whatever YouTube interview they’ve just watched.

But there’s a simpler way to broaden your exposure to promising commodities sectors: buy the ETFs that specialize in junior miners. They own a wide variety of companies most of us have never heard of, which means they have their share of losers. But they also (hopefully) include some 10-baggers. And — very important — in a bull market, they’ll attract a lot of generalist money from people who want quick exposure to the wildest parts of hot sectors. So the junior miner ETFs might, for a while at least, outperform their large-cap cousins.