Loading ...On top of that, GDXJ will be making a massive and sure-to-be-messy portfolio reallocation in June. According to BMO Capital Markets’ research, GDXJ will add roughly 18 new component names in June. BMO suggests that GDXJ will sell more than half of its current holdings – roughly $3 billion worth – in order to fund the new positions.
This is a tragedy for ETF holders. For one, you are hit with significant tax consequences of an ETF engaging in such a high rate of portfolio turnover. Additionally, arbitrage traders are able to take advantage of forced shifts in ETF positioning by buying the new additions and shorting the deletions. With GDXJ having such huge positions, it makes it an easy target for algo-trading shops.
For investors interested in gold juniors, unless you have a very small amount of capital, it’s probably better for most people to buy four or five good junior miners within the industry rather than buying this increasingly defective ETF. If you ditch the ETF, the 0.52% expense ratio that you save gives you $52/year to cover trading costs on an investment of $10,000; that should be plenty for maintaining a small gold mining juniors basket of your own.
https://seekingalpha.com/article/4062650-big-gold-mining-juniors-etf-shows-cracks-indexing-model
Maddog de ja vous warning about one of the cash burner ETFs you mentioned
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