Gold Miner ETF Pulls in $400 Million Amid Rally

CHICAGO (Aug 20) Gold Miner ETFs have been extremely active in the past couple days on heavy volume and mostly a uni-directional rally.

GDX (Market Vectors Gold Miners, Expense Ratio 0.52%) has reeled in nearly $400 million in the past couple days.  We continue to see very heavy activity in the sector here nearing the end of August.

Recent inflows to GDX have raised its asset base now to $5.6 billion, despite poor performance in both the trailing one year and trailing five year periods.

Likewise, traders and institutional investors increasingly continue to gravitate to two Direxion ETFs that are quickly becoming household names since their late 2010 inception.

DUST and NUGT have literally seen record trading volume days since inception just in the past few trading days, as interest in trading the latest move in the Miners is clearly alive and well.

DUST and NUGT track the same underlying index that GDX does, the Arca Gold Miners Index, but are structured to deliver three times the daily inverse and levered long return respectively, to that index.

NUGT has $721 million now in assets under management and averages a massive 24.3 million shares traded daily, while DUST only has $143 million in AUM and 1.3 million shares daily.

Thus, as we have mentioned in these spots before, despite the actual returns that the Gold Miners have delivered, it seems that flows have consistently favored the bulls, as GDX has pulled in +1.2 billion YTD as well.

Effective today, NUGT made a 1:10 Reverse stock split, while DUST made a 2:1 stock split.  The NUGT reverse split should materially increase investor demand...especially Institutional Investor demand since Institutional Investors generally do not buy low priced stocks.