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Market Vectors Junior Gold Miners ETF Message Board

  • stimulatemypackage stimulatemypackage Nov 20, 2009 9:06 AM Flag

    With 2.75 million shares created yesterday

    it is apparent that hedge funds like this just like they do the GDX. A whole new playground promising abavoe average returns to them.

    Shares outstanding symbol = ^GDXJ-SO

    Bought more @26.42 pre-market. Loks like this thing gets stronger during the day as accumulation happens.

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    • 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...

      • 1 Reply to itscomingin2012
      • 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

 
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