I'm not sure how the "shares are created", but what appears to me is that the ETF had $2 million in "seed money" to start.
We're seeing average daily trading of GDXJ shares in the order of 2.8 Million shares. At $26/share that's $72,800,000 of "trading" per day! If there have been 7 days of trading, that's a sum total of $509,600,000. A half billion dollars. Not "chump change".
Of course, some of these trades may have been "IN & OUT" day trades - but I suspect that the majority are from people & institutions, who, like me, have taken a "position" in Junior Miners for their portfolio.
The "creation" of these ETF shares will mean a huge influx of "new money" into the underlying Juniors' stocks - giving these smaller companies access to plentiful funding (which has always been a huge & expensive problem for them) to do more exploration and extraction.
It will also mean an increase in the share price of their individual stocks, where, for some of the smaller companies, the influx may be a huge percent increase in their historical pricing, since each dollar "invested" in the ETF gets proportionately attributed to each underlying stock. It may help reduce volatility in the underlying stocks too.
The day that Pension Funds decide to "diversify" - and put a TINY percentage of their monies into Mining Stocks - this fund, along with GDX - is a "no-brainer". They won't have to "monitor" their individual stocks to fulfil their fiduciary duties, just the "one ticker". That would blow these funds - especially this one - right out of the water...
In the prospectuses (prospecti?) for ETFs you see language about "Authorized Participants" who are able to create units
The shares of the Funds (the “Shares”) are listed for trading on NYSE Arca, Inc. (“NYSE Arca”), and trade in the secondary market at prices that may differ to some degree from the net asset value (“NAV”) of the Shares. Unlike conventional mutual funds, the Trust issues and redeems Shares of the Funds on a continuous basis at NAV only in large specified blocks each called a Creation Unit. Creation Units are issued and redeemed principally in-kind for securities generally included in a Fund’s Index. Except when aggregated in Creation Units, Shares are not redeemable securities of the Trust.
Creation Transaction Fees and Redemption Transaction Fees The Trust issues and redeems Shares at NAV only in blocks of 50,000 Shares or multiples thereof. As a practical matter, only authorized participants may purchase or redeem these Creation Units. A standard creation transaction fee of $1,000 (the “Creation Transaction Fee”) is charged to each purchaser of Creation Units. The fee is the same regardless of the number of Creation Units purchased by an authorized participant on the same day. An authorized participant who holds Creation Units and wishes to redeem at NAV would also pay a standard redemption transaction fee of $1,000 (the “Redemption Transaction Fee”) on the date of such redemption(s), regardless of the number of Creation Units redeemed that day. Authorized participants who hold Creation Units will also pay the annual Fund operating expenses described in the table above