JNUG offers geared exposure (2x) to the MVIS Worldwide Junior Gold Miners Index, which is a market-cap-weighted index of global gold mining businesses that earn at least 50% of their income from gold or silver mining. The fund provided 3x exposure to the same index prior to March 31, 2020.
Is JNUG a decent exchange-traded fund (ETF)?
JNUG aims to provide daily returns three times higher than the MVIS Global Junior Gold Miners Index.
Small-cap firms and gold prices are both more volatile than the typical investment, so JNUG is a highly volatile and speculative security when both aspects are taken into account.
The JNUG ETF had a 27 percent year-to-date return. However, it is down 17.9% from July of last year.
Is it wise to invest in JNUG?
The Direxion Daily Junior Gold Miners Index Bull (NYSE:JNUG) has gained 278 percent since the stock market bottomed on March 23, but that’s not all. Gold is a terrific medium-term trade right now, but a bad long-term investment. However, even in the medium run, the JNUG ETF is too risky to own.
What exactly are JDST and JNUG?
The MVIS Global Junior Gold Miners Index (MVGDXJTR) tracks the performance of foreign and domestic micro-, small-, and mid-capitalization companies that generate, or demonstrate the potential to generate, at least 50% of their revenues from, or have at least 50% of their assets related to, gold and/or silver mining, hold real estate, or have mining projects that have the potential to produce at least 50% of the company’s revenue from gold and/or silver mining, hold real property, or have mining projects that have An index cannot be purchased directly.
Why is JNUG dropping so fast?
The long and short of it is that the more volatile the benchmark, the more value is lost over time with leveraged ETFs. This is true even if the benchmark index remains unchanged throughout the year. This is because the benchmark index is likely to have significant up and down swings even in a flat year. Investors can lose 50% of their investment if a leveraged ETF like JNUG moves within 10 points every two days over a period of 60 days.
This is a Gamble, Not an Investment
To be clear, JNUG would not exist if it did not generate revenue for someone. JNUG stock, on the other hand, is a stock that the average investor should avoid.
As I previously stated, more can actually be less with this leveraged ETF. That is why I consider JNUG to be such a risk.
It’s feasible to make a large profit, but regular investors are taking on much too much risk. It is preferable to buy junior mining stocks directly if you wish to invest in them. Kinross Gold Corporation (NYSE:KGC) and B2Gold (NYSEAMERICAN:BTG), for example, are two of the underlying stocks of theMVGDXJ, and are up 34 percent and 35 percent on the year, respectively.
You should be able to sleep better at night if you invest in gold. When you invest in JNUG stock, though, you must remain vigilant and on your toes at all times.
Is JNUG a gold-related index?
Despite gold’s 17 percent year-to-date gain, JNUG has underperformed by 85%, demonstrating a complete lack of correlation with the gold price. GLD for gold prices or GDX, RING, or GDXJ for gold miners index ETFs are better solutions for gold-related investing.
Will JNUG reorganize?
A 1-for-10 reverse stock split has been announced for Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG). The reverse stock split will take effect on April 23, 2020, before the market opens.
Is now a good time to invest in gold?
As of Friday’s close, gold futures on the Multi Commodity Exchange (MCX) had reached their highest level in nine months, at Rs 49,346 per 10 gm. On the day, the yellow metal rose 0.26 percent. On the MCX, silver gained 0.27 percent, or Rs 183 per kilogram, to close at Rs 67,148.
This week, precious metals saw substantial gains on the international market, as rising US consumer prices raised the attraction of gold and silver as an inflation hedge. The Consumer Price Index in the United States increased by 6.2 percent on an annual basis, the highest level in more than three decades. In November, consumer morale fell to its lowest level since 2008, with inflation being the most major cause for the decline.
However, as festive demand dwindled, gold was given at a discount in India’s physical marketplaces.
“Gold and silver prices are expected to remain stable next week.” Some economists believe that low consumer sentiment will lead to fewer consumption, which will result in weaker GDP. As a result, the risk of stagflation is increasing. As a result, investors may be drawn to gold. Furthermore, the fact that gold can break out while the US dollar is strong indicates that it has the impetus to rise,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.
The immediate technical hurdle for MCX Gold December is at 49,665, and a break above might take prices to 50315 levels. Iyer noted that the supports for the coming week are 48,560 and 47,900 on the negative. The MCX Silver December supports are around 65140 and 64000 on the domestic market. On the upside, if prices move over 67300, it may test the levels of 68875.
Due to rising inflation and increased demand for bullion, experts are also bullish on the prices of precious metals such as gold and silver in the coming months.
According to Metals Focus, gold consumption in China will increase by 40% in 2021, while industrial silver demand reached an all-time high throughout the year. The sole impediment to gold prices continuing higher is the increasing dollar index; nonetheless, rising gold levels imply that momentum is strong.
On prospects of an earlier than expected interest rate hike, the US dollar held firm above 95 marks against a basket of six rival currencies, marking the greatest weekly advance in nearly five months.
What is JNUG’s polar opposite?
An Overview of the Fund JNUG and JDST are exchange-traded funds that “target daily investment returns of 300 percent, or 300 percent of the inverse (or opposite), of the performance of the MVIS Global Junior Gold Miners Index, before fees and expenses” (according to the funds’ website). The bullish fund is JNUG (+3X), whereas the bearish fund is JDST (-3X).
What are 3X stocks, exactly?
Leveraged 3X ETFs monitor a wide range of asset classes, including stocks, bonds, and commodity futures, and use leverage to achieve three times the daily or monthly return of the underlying index. These ETFs are available in both long and short versions.
More information on Leveraged 3X ETFs can be found by clicking on the tabs below, which include historical performance, dividends, holdings, expense ratios, technical indicators, analyst reports, and more. Select an option by clicking on it.