Gold Miner ETFs have been extremely active in the past couple days on heavy volume and mostly a uni-directional rally.
GDX (Market Vectors Gold Miners, Expense Ratio 0.52%) has reeled in nearly $400 million in the past couple days while NUGT (Direxion Daily Gold Miners Bull 3X Shares, Expense Ratio 0.95%) has seen more than $700 million flow out of the fund, which is likely profit taking into the recent move.
Conversely, DUST (Direxion Daily Gold Miners Bear 3X Shares, Expense Ratio 0.95%) has also been active, taking in +$200 million amid record volume in the product.
We continue to see very heavy activity in the sector here nearing the end of August.
Recent inflows to GDX have raised its asset base now to $5.6 billion, despite poor performance in both the trailing one year and trailing five year periods.
Likewise, traders and institutional investors increasingly continue to gravitate to two Direxion ETFs that are quickly becoming household names since their late 2010 inception.
DUST and NUGT have literally seen record trading volume days since inception just in the past few trading days, as interest in trading the latest move in the Miners is clearly alive and well.
DUST and NUGT track the same underlying index that GDX does, the Arca Gold Miners Index, but are structured to deliver three times the daily inverse and levered long return respectively, to that index.
NUGT has $721 million now in assets under management and averages a massive 24.3 million shares traded daily, while DUST only has $143 million in AUM and 1.3 million shares daily.
Thus, as we have mentioned in these spots before, despite the actual returns that the Gold Miners have delivered, it seems that flows have consistently favored the bulls, as GDX has pulled in +1.2 billion YTD as well.
Given the recent volatility in the Miners space, induced likely from the recent volatility we have seen in spot precious metals themselves, these funds are certainly not for the weak of heart and should be used as part of sophisticated short term trading and/or hedging strategies only. Names of interest that are top components in the Arca Gold Miners Index are GG (11.97%), ABX (10.50%), NEM (8.51%), GOLD (5.48%), and AUY (5.14%).
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