Renaissance Technologies and silver mining stocks
During 1Q15, Renaissance Technologies’ exposure to silver mining companies include Fortuna Silver Mines (FSM), Great Panther Silver (GPL), Pan American Silver (PAAS), Silvercorp Metals (SVM), and Endeavour Silver (EXK). The position in Coeur Mining (CDE) represented 0.008% of the fund’s 1Q15 portfolio. Of all the stocks, Coeur Mining yielded returns of 6.65%, so far, in 2015.
Rationale behind investing in gold and silver
As noted earlier, the investment in silver mining stocks appears to be based on the view that the stocks could outperform the market. This is due to a rise in consumer demand for silver. The demand increased as a result of increased inflation. Silver miners tend to benefit when there’s foreign exchange movement and fluctuations in crude oil prices. Perhaps Renaissance Technologies believes that the market hasn’t priced in a premium already. It expects a sharp correction in the market value of silver mining stocks, including Coeur Mining, when the oil prices fluctuate more.
Investors seeking to gain exposure to Coeur Mining can consider the VanEck Vectors Gold Miners Index (GDX). Newmont Mining (NEM), Hecla Mining (HL), and Pan American Silver account for 9.92% of GDX’s holdings.