An ETF that appears to be in focus this morning is NUGT (Direxion Daily Gold Miners Bull 3X, Expense Ratio 0.95%), as the fund has traded more than 2 million shares in the early-going and has rallied nicely amid further news regarding African Barrick.
NUGT is designed to track the NYSE Arca Gold Miners Index on a daily basis, incorporating three times daily leverage. GDX (Market Vectors Gold Miners) is a well-known un-leveraged ETF that tracks this same underlying index, without the leverage component.
In recent options recaps we have pointed out the presence of heavier than average call option activity in both GDX and related ETF GDXJ (Market Vectors Junior Gold Miners), so the space has clearly been in play in recent sessions.
From an asset flows perspective, GDX has most recently seen assets leave the door, with more than $400 million being redeemed from the fund in the past week. NUGT and GDXJ have seen net creations recently, but not of notable asset size.
The Miners have lagged broad based equity benchmarks terribly in the trailing one and five year periods, so investors in that space are likely looking for a lift of off recent lows.
Top holdings in the NYSE Arca Gold Miners Index that both NUGT and GDX track are the following names: ABX (12.74%), GG (11.56%), NEM (8.57%), AUY (5.58%), and AEM (5.55%).
The Index composition leans towards mega and large cap companies, with 77% of the portfolio qualifying as either large or mega cap.
From a geographical standpoint, Canada is well represented among Miners, with 63.95% of the portfolio centered in Canada, and the remaining portions being carved up accordingly (U.S. 15.76%, Africa 11.52%, Europe 4.60%, and Latin America 4.28%).
In coming trading sessions we will watch not only the underlying action in Mining related ETFs including the aforementioned funds, but also be mindful of potential additional ETF options activity that may provide clues on the shorter term direction of this sector.
Direxion Daily Gold Miners Bull 3X
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.