Direxion, the ETF issuer known for its pairing of leverage and inverse strategies, launched two new junior miner ETFs on Thursday, Oct. 3, spinning off the volatility in the gold mining industry with a junior miner 3X bull fund and a junior miner 3X bear fund.
The funds and their tickers are:
- Direxion Daily Junior Gold Miners Index Bull 3X Shares (JNUG)
- Direxion Daily Junior Gold Miners Index Bear 3X Shares (JDST)
The two portfolios are junior iterations of the issuer’s Direxion Daily Gold Miners Bull 3X fund (NUGT) and Direxion Daily Gold Miners Bear 3X (DUST), with the new funds affixed with tickers to match their big-sibling portfolios.
JNUG and JDST are two pieces of investment equipment designed for sophisticated investors, as Direxion made clear in the funds’ regulatory paperwork. First of all, these funds rebalance daily, which can set their returns off dramatically from those of the index they track. ‘Bear’ funds like DUST and the new-to-market JDST are also specifically designed to provide inverse investment results of the index it tracks. When the index rallies, the fund spikes. But when it slumps, the fund barrels downward like NUGT, which had to undergo not one, but two reverse share splits this year alone to recover from dirt-cheap share prices.
Finally, junior miner ETFs don’t need any help when it comes to volatility. For example, the Market Vectors Junior Gold Miner ETF (GDXJ | B-35), which isn’t geared, but simply tracks the same index that JDST and JNUG will track—the Market Vectors Junior Gold Miners Index—have shot up and sunk down on a nearly daily basis amid the tumultuous past nine months in the world of gold.
JNUG and JDST will begin trading on the New York Stock Exchange’s electronic platform NYSE as of Thursday morning at the opening bell, with an expense ratio of 95 basis points attached to each.
Our annual fixed-income conference is coming up in a little more than a week and I can’t wait.
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