Loading ...To offer some insights…
JNUG/JDST are 3x derrivatives of GDXJ. NUGT/DUST are 3x derrivatives of GDX. At ‘this’ level these leveraged ETF’s don’t mix so that specuulators can pick their poison.
JNUG is heavily day traded and represents 53% of GDXJ’s inflows/outflows. So much so that GDXJ is having serious trouble keeping up with the volume. i.e ‘they’ have to actually purchase & sell those shares every day while JNUG just buys options/futures on the single ETF it leverages. To bring more liquidity to their ETF, GDXJ now holds their own large cap ETF (GDX) as a top holding.
JNUG, JDST, NUGT & DUST are SERIOUSLY distorting and damaging the entire Gold & Silver mining sector in ways that didn’t exist back in the 2011 Gold bull market. Because of these 3x leveraged ETF’s, top holdings of GDXJ get slammed around daily by day traders, while the miners not held by or at the bottom end, languish in obscurity (even if they’re execellent picks). Regular rotation of these holdings also makes for unpredictible returns. For example, GDXJ might pickup a miner you own while Gold is in a down-trend and shit all over it. Then drop your miner once Gold turns around. Or vice versa if you’re lucky.
Whether you like it or not, virtually the entire PM mining sector is now the bitch of these 4 ETF’s. So if you hold any individual miner, make it your business to know the stake GDXJ or GDX has in it; and at what point in Gold or Silver cycle they hold it. Real investing is neither simple nor straight forward…and a lot of risk-on, bull market chasing, lemming investors are going to find that out the hard way.
FYI beware of UGLD, DGLD, USLV & DSLV as well. Their movements tend to underperform their decay so are only useful for large short-term moves in Gold & Silver.