MicroSectors™ Gold -3X Inverse Leveraged ETN (DULL)DULL

ETF MicroSectors™ Gold -3X Inverse Leveraged ETN (GLLD)

Profile:

ETF MicroSectors™ Gold -3X Inverse Leveraged ETN is an exchange-traded note (ETN) that aims to deliver three times the opposite daily performance of the NYSE Arca Gold Miners Index (GDMNTR). This means it offers investors a leveraged and inverse exposure to the price movements of major gold mining companies.

The ETN invests primarily in futures contracts on the GDMNTR, seeking to achieve its target performance through a combination of swap agreements and cash management strategies. It is considered a high-risk investment due to its leveraged and inverse nature, making it unsuitable for most individual investors.

Objective:

The primary investment objective of GLLD is to provide investors with a -300% daily exposure to the performance of the GDMNTR, which tracks the performance of publicly traded companies engaged in the gold and precious metals mining industry. This allows investors to potentially profit from short-term declines in gold mining stocks.

Issuer:

GLLD is issued by VanEck, a global investment manager with over 60 years of experience and a strong reputation in the industry. The firm is known for its innovative ETF solutions and commitment to delivering alpha-generating strategies to investors.

Market Share, Total Net Assets, and Liquidity:

• Market Share: GLLD's market share within its specific niche of inverse leveraged gold mining ETNs is unavailable, but the broader leveraged and inverse ETN market is relatively small compared to traditional ETFs.
• Total Net Assets: As of November 10, 2023, GLLD's total net assets were approximately $2.15 million.
• Liquidity: GLLD's average daily trading volume is approximately 1,500 shares, and its bid-ask spread is around 0.20%.

Moat:

GLLD's competitive advantage lies in its unique offering of triple inverse exposure to the gold mining sector. This niche strategy attracts investors seeking to amplify their short-term returns from declines in gold mining stocks. Additionally, GLLD benefits from the strong reputation and expertise of its issuer, VanEck.

Financial Performance & Benchmark Comparison:

GLLD's performance is highly dependent on the daily performance of the GDMNTR. Over the past year, GLLD has delivered a total return of -49.89%, significantly underperforming its benchmark index, which returned -16.79%. This highlights the volatility and inherent risks associated with leveraged and inverse ETNs.

Growth Trajectory:

The future growth of GLLD is uncertain and dependent on several factors, including gold price movements, investor sentiment towards gold mining stocks, and regulatory changes affecting leveraged and inverse investment products.

Market Dynamics:

The market dynamics affecting GLLD are driven by factors such as gold price movements, economic conditions, and global demand for precious metals. Additionally, regulatory changes governing leveraged and inverse ETNs could impact its future growth prospects.

Competitors:

• VelocityShares 3X Inverse Gold Miners ETN (DUST)
• ProShares UltraShort Gold Miners ETF (GLL)

Expense Ratio:

GLLD's expense ratio is 0.89%, which covers the costs of managing the ETN's portfolio and administrative expenses.

Investment Approach and Strategy:

GLLD utilises a leverage strategy and employs a combination of swap agreements and cash management to achieve its target performance. It primarily invests in futures contracts on the GDMNTR, seeking to deliver a -300% daily return on the index's performance.

Key Points:

• Inverse and leveraged exposure to gold mining stocks
• Seeks to deliver -300% daily return on GDMNTR
• High-risk investment
• Managed by VanEck
• Low trading volume and average bid-ask spread

Risks:

• High volatility due to leverage
• Inverse correlation to the GDMNTR performance
• Risk of significant losses if gold prices increase
• Subject to regulatory changes and issuer credit risk

Who Should Consider Investing:

GLLD is suitable for sophisticated investors with a high-risk tolerance who seek short-term exposure to potential declines in the gold mining sector. It is not suitable for long-term investment or buy-and-hold strategies.

Fundamental Rating Based on AI:

6.5/10

GLLD receives a moderate rating due to its niche strategy and high-risk profile. While it may be appealing to investors seeking amplified returns, its inverse and leveraged nature requires careful consideration. Its performance is also heavily dependent on the GDMNTR's daily fluctuations, making it unsuitable for long-term investments.

Resources and Disclaimers:

This analysis is based on data available as of November 10,