NEW YORK ( TheStreet) -- It is a new year and the ETF industry has started rolling out new products. One of the first funds is the Global X Aluminum ETF ( ALUM). The fund owns companies that are either narrowly or broadly in the aluminum business. This is not one of the funds you may have read about that will own physical aluminum in a vault or other storage facility.

The new aluminum ETF is the latest in a long line of very specialized materials-related funds from many different providers. There will be more funds to come, which I think is a good thing, as it gives more choices to investors not comfortable with individual stocks. It would be perfectly reasonable to build the materials portion of a portfolio with a platinum mining stock and an aluminum stock, so by extension, it could also be reasonable to use specialized ETFs for those same metals.

At first glance, the diversification for the Global X Aluminum ETF appears to be excellent, not perfect, but still excellent. The largest holding, at 15%, of the 22 that comprise the fund, is integrated mining company Rio Tinto ( RIO), which could probably be a holding in many of the specialized funds that now exist. While some may be disappointed to see such a large company in the fund, it has a long-term track record for outperforming the iShares S&P Global Materials ETF ( MXI), albeit with more volatility.

The bigger drawback to the composition of the fund is the inescapable inclusion of Alcoa ( AA). There are certain stocks that seemingly can do no wrong, like maybe Apple ( AAPL). Then there are stocks, like Alcoa, that seemingly can do no right, or at least very little right. It has been a serial earnings disappointer and I cannot find any period longer than a few months where it outperformed the Materials Sector SPDR ( XLB) or MXI.

The fund has quite a global footprint, with the U.S. being the largest country, at 21%, followed by Hong Kong (i.e., China), at 19%, Japan 15%, the UK at 15%, and then smaller weightings to Norway, Australia and Singapore. As a note, Rio Tinto is being counted as U.K. exposure, but some may think of it as more of an Aussie company.

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