Direxion Launches Bull/Bear Junior Gold Miner ETFs (JNUG, JDST)

by on October 4, 2013 | ETFs Mentioned:

Though the U.S. government has shuttered its doors, the ETF industry has seen plenty of activity this week as ETF issuers continue to fill the product pipelines. Just this week, WisdomTree introduced its Emerging Markets Consumer Growth Fund (EMCG, n/a), which focuses on profitable companies that derive the majority of their revenues from emerging markets. Deutsche Bank also expanded its lineup of currency-hedged ETFs with the launch of three new funds, while RevenueShares debuted a first-to-market “revenue-weighted” dividend ETF. Wrapping up the slew of launches this week, Direxion, one of the largest issuers of leveraged and inverse ETFs, announced the addition of a pair of Bull/Bear ETFs [see The Best Performing ETFs of All Time].

Under the Hood: JNUG & JDSTJunior Gold Miners

Direxion’s Daily Junior Gold Miners Index Bull 3x Shares (JNUG) and Daily Junior Gold Miners Index Bear 3x Shares (JDST) both track the Market Vectors Junior Gold Miners Index, which offers exposure to a global universe of small- and mid-cap gold and silver mining companies – better known as “junior” miners. JNUG is designed to provide 3x exposure to this index, while JDST offers -3x leverage [see GLD-Free Gold Bug ETFdb Portfolio].

The funds’ underlying index currently invests in junior gold miners from around the world, though exposure is tilted towards equities from Australia and Canada, which together account for more than 80% of the index. Meaningful exposure is also allocated towards stocks from Singapore, the U.S., Hong Kong, and Britain.

Meet the Competition

Currently, there is only one ETF that offers targeted exposure to the small and mid capitalization segment of the gold miner space – Van Eck’s Market Vectors Junior Gold Miners ETF (GDXJ, B+), which also tracks the Market Vectors Junior Gold Miners Index.

Global X’s Pure Gold Miners ETF (GGGG, C) also provides exposures to gold miners, but does so with a “pure play” twist. GGGG only invests in companies that generate the vast majority of their revenues from gold mining. As a result of their selection methodology, more than 80% of the fund’s total assets are allocated to small- and mid-cap gold miners [see The Biggest Technical Glitches On Wall Street].

But for those looking to make a bullish or bearish bet on the gold mining industry, Direxion’s own Bull/Bear gold miners funds are also viable options:

  • Daily Gold Miners Bull 3x Shares (NUGT, B)
  • Daily Gold Miners Bear 3x Shares (DUST, B)

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Disclosure: No positions at time of writing.