Gold Miner ETFs Buck Market Sell-Off

ETF Trends

Exchange traded funds that invest in miner shares have sidestepped the pullback in the stock market following President Barack Obama’s victory in the election.

The Dow has tumbled several hundred points since Tuesday but Market Vectors Gold Miners (GDX) has risen the past three sessions.

We also note that the Gold metal itself, after seeing some weakness in the early going yesterday, rallied to finish the day net up. Call buyers were present yesterday as well in GDX, which makes the price action in the ETF yesterday even that more eye opening. Top holdings in GDX currently are ABX (13.62%), GG (12.25%), NEM (8.98%), AUY (5.02%), and SLW (4.99%).

Those who believe that the relative strength in the Gold Miners is going to continue in the near term may look at NUGT (Direxion Daily Gold Miners Bull 3X), which delivers three times the daily leveraged return of the NYSE Arca Gold Miners Index, which is the same index that GDX tracks. For those looking to play the space from the long side without incorporating leverage into their portfolios, RING (iShares MSCI Global Gold Miners), PSAU (PowerShares Global Gold and Precious Metals Portfolio), GGGG (Global X Pure Gold Miners), and GDXJ (Market Vectors Junior Gold Miners) are other potential alternatives in this space.

For bears, DUST (Direxion Daily Gold Miners Bear 3X) is available as a short term leveraged inverse trading/hedging vehicle. For comparative purposes, GDX has fared relatively well in 2012 compared to peers, only falling 0.70% YTD versus PSAU (-5.75%), GDXJ (-7.46%), and GGGG (-7.92%). RING having debuted after the first of this year, does not have a YTD number yet being the fund is still largely in its infancy.

Market Vectors Gold Miners

View photo

.

gold-miner-etf

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

View Comments (0)