April 24, 2017 / 4:21 PM / 6 months ago

BUZZ-Gold miners not much of a safe haven for ETF investors

** Gold mining ETFs in spotlight after risk-on buying sends popular small-cap precious metals stocks falling

** “Junior” gold mining ETFs have been a popular bet on rising volatility as the smaller gold stocks held in those funds can move quickly on news headlines

** Money has flooded into 3x leveraged Junior Gold Miners Bull 3X ETF as well as VanEck Vectors Junior Gold Miners ETF

** That demand has forced GDXJ to hit limits preventing it from owning too big a stake in particular cos and it has been buying larger-cap miners

** GDXJ manager Van Eck Associates Corp owns nearly 19 pct of IAMGOLD Corp’s outstanding stock, for instance

** The manager of GDXJ’s index recently announced that it would include more mining cos with a higher market cap in a set of changes taking effect June 17

** JNUG’s manager temporarily stopped accepting orders to create new shares of fund on April 13 and resumed accepting orders Monday morning

** JNUG down 5.4 pct and GDXJ down 2 pct as shares of gold miners slumped Monday after first round of French elections ended with a win for centrist Macron, easing worries over a political shock in the second round and hitting safe-haven gold

** Nonetheless, despite steep decline, both JNUG and GDXJ trading within half a pct of a real-time estimate of the value of their underlying portfolio, implying no breakdown in trading needed to keep ETFs in line with their value

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below