By David Stevenson – This week I’m looking at what I call the ‘Picks, Shovels and Roughnecks’ theme. I am absolutely convinced that the human race is degrading its way through this planet’s bountiful treasure trove of energy and key materials. Anticipated increases in the global population can only have a negative impact on resource balances. As a consequence, we will need to spend a vast amount of money digging and drilling stuff out of the ground, at ever-larger scale and in more difficult circumstances. Thus starts an investment journey which suggests that energy and mining equipment manufacturers and suppliers are the place to be – but what to actually own?

International Securities Exchange (ISE) and IndexIQ have announced a broad partnership to develop and launch a range of exchange-traded products (ETPs) linked to physical commodities. While ISE is perhaps best known as a US options exchange, the company has an established index business and recently has manoeuvred itself deeper into the fast-growing ETP industry. The link-up with IndexIQ, a niche provider of alternative ETFs, looks well suited as both companies have a demonstrated pedigree in creating innovative products.

Following last year’s correction in rough diamond prices, there is now limited downside in diamond-related equities and plenty of reasons to be bullish, most notably increasing Asia demand. That’s the view of Nomura, the investment bank, which recently initiated on the diamond sector with a report entitled, ‘A long-term story that is ready to sparkle’. Since the launch of the PureFunds ISE Diamond/Gemstone ETF (GEMS) on the NYSE Arca in November last year, investors can access this sector in pure-play form in one simple trade.

PureFunds made its debut on Thursday with the launch of three innovative commodity-related exchange-traded funds (ETFs), including the first ever ETF to hold shares exclusively of companies engaged in the diamond and gemstone industry. New Jersey-based PureFunds becomes the latest entrant into the highly competitive US ETF marketplace. The company aims to provide investors with easy access to niche sectors through pure-play ETFs, and envisages further launches of tactical ETFs that the market desires but do not currently exist.