The Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSEArca: JNUG) and the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSEArca: JDST) have the benefit of first move advantage among leveraged exchange traded funds tracking junior gold miners.
As such, JDST and JNUG are the marquee leveraged equivalents to the popular Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ), but it looks like JDST and JNUG could be getting some competition.
ProShares, the largest issuer of inverse and leveraged ETFs, has filed plans with the Securities and Exchange Commission to introduce three new inverse and leveraged junior miners ETFs, all of which would track the Market Vectors Global Junior Gold Miners Index, GDXJ’s underlying index.
The ProShares Short Junior Gold Miners, if it comes to market, will seek to deliver to the daily inverse performance of the Market Vectors Global Junior Miners Index. That fund is an inverse, but not leveraged product.
The ProShares UltraShort Junior Gold Miners would attempt to deliver twice the daily inverse performance of that index, indicating that the ETF would be the double-leveraged rival to JDST.
The ProShares Ultra Junior Gold Miners would attempt to deliver twice the daily performance of the aforementioned index. The SEC filing did not mention tickers or expense ratios for the ProShares ETFs, indicating a launch is not imminent.
Although leveraged mining ETFs are volatile and, in the case of JNUG, terrible performers when gold prices move in the opposite direction of the fund’s bullish or bearish objective, the funds have been popular with investors.
For example, JNUG has hauled in over $636 million in new assets this year, about half the inflows that have been directed to GDXJ.
JNUG, which is down 77.4% this year, will be reverse split on a 1-for-10 basis prior to the open of U.S. markets on Dec. 23. [A Reverse Split for JNUG]
ETF Trends editorial team contributed to this post.