Direxion introduces triple leveraged long and short junior gold miners ETFs

Oct 10th, 2013 | By | Category: Commodities

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Direxion, a leading US-based provider of short and leveraged exchange-traded funds, has introduced two new products offering triple leveraged long and short exposure to a global portfolio of junior gold mining companies.

Direxion introduces triple leveraged long and short junior gold miners ETFs

US-based Direxion has introduced a pair of ETFs offering triple leveraged long and short exposure  junior gold mining companies.

Both products have been listed on the NYSE Arca, are linked to the Market Vectors Junior Gold Miners Index, and have a net expense ratio of 0.95%.

The Direxion Daily Junior Gold Miners Index Bull 3X Shares ETF (JNUG) seeks to achieve daily investment results, before fees and expenses, of 300% of the performance of the Market Vectors Junior Gold Miners Index.

Conversely, the Direxion Daily Junior Gold Miners Index Bear 3X Shares ETF (JDST) seeks daily investment results, before fees and expenses, of 300% of the inverse of the performance of the Market Vectors Junior Gold Miners Index.

Provided by Market Vectors Indices, a subsidiary of Van Eck Global, the Market Vectors Junior Gold Miners Index has been specifically designed to be investable and licensed as the basis for financial products. It tracks the performance of the most liquid junior companies in the global gold and silver mining industry.

The unique pure-play approach of the index covers companies that invest primarily in gold or silver, or generate at least 50% of their revenues from gold or silver mining or own properties that have the potential to generate at least 50% of their revenues from gold or silver mining when developed.

The index includes companies from various countries around the world, including Canada, Australia, US, UK and South Africa. To ensure liquidity, companies must have a minimum average daily trading volume (ADTV) of $1 million and a market capitalisation greater than $150 million.

Constituents’ weights are capped at a maximum of 8% per company. Major constituents currently include Argonaut Gold, Torex Gold Resources, China Gold International, Dundee Precious Metals and McEwen Mining. As of September month end, the mean market capitalisation of the index was $362.46 million and the median market cap was $294.74 million.

Commenting on the launch, Eric Falkeis, President of Direxion, said: “At a time when a growing number of investors are expressing interest in exposure to companies engaged in the exploration and production of gold, we are offering liquid exposure to this sector with the benefit of added leverage. These two funds are designed for traders that wish to take a bullish or bearish stance on the gold-mining industry.”

Investors considering an investment in one of these ETFs should note that the funds do not attempt to meet their investment goals for periods longer than one day.

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