MicroSectors Gold Miners -3X Inverse Leveraged ETNs (GDXD)

Overview

The MicroSectors Gold Miners -3X Inverse Leveraged ETNs (GDXD) provide -3x leveraged exposure to the daily performance of the NYSE Arca Gold Miners Index. It is designed for sophisticated investors seeking short-term inverse exposure to gold mining companies. The asset allocation is focused on derivatives to achieve the leveraged inverse return.

Reputation and Reliability

REX Shares is known for providing leveraged and inverse exchange-traded products (ETPs), catering to sophisticated investors. Their reputation is based on the performance and structure of these high-risk products.

Management Expertise

The management team at REX Shares specializes in creating and managing complex ETPs, requiring expertise in derivatives and leveraged investment strategies.

Goal

To seek daily investment results, before fees and expenses, that correspond to three times (3x) the inverse (opposite) of the daily performance of the NYSE Arca Gold Miners Index.

Investment Approach and Strategy

Strategy: Tracks the daily performance of the NYSE Arca Gold Miners Index on a leveraged inverse basis using swaps and other derivative instruments.

Composition Primarily composed of financial derivative instruments, specifically swaps, designed to replicate the inverse leveraged return of the underlying gold miners index.

Market Share: GDXD holds a niche market share within the leveraged and inverse gold mining ETP space.

Total Net Assets (AUM): 44538114

Key Competitors

• Direxion Daily Gold Miners Index Bear 2x Shares (DUST)
• ProShares UltraShort Gold Miners (GDXS)

Competitive Landscape

The leveraged and inverse gold miners ETF market is competitive, with a few key players. GDXD offers -3x leverage, while competitors offer different levels of leverage. GDXD's advantage lies in its specific leverage factor, appealing to investors with particular risk/reward preferences. A disadvantage is the increased risk and potential for rapid value erosion due to compounding.

Historical Performance: Historical performance is highly volatile due to the leveraged and inverse nature of the ETN. Past performance is not indicative of future results.

Benchmark Comparison: Due to the daily leverage reset, long-term performance deviates significantly from a simple inverse relationship to the NYSE Arca Gold Miners Index.

Expense Ratio: 0.95

Average Trading Volume

GDXD exhibits moderate liquidity, with an average trading volume that can fluctuate based on market conditions.

Bid-Ask Spread

The bid-ask spread can be relatively wide, reflecting the leveraged nature and volatility of the ETN.

Market Environment Factors

Economic indicators, gold prices, mining sector performance, and overall market sentiment significantly influence GDXD's performance.

Growth Trajectory

Growth trends are dependent on investor demand for leveraged inverse exposure to gold miners and are subject to rapid shifts in sentiment.

Competitive Edge

GDXD's advantage stems from its -3x leverage factor, offering a specific risk-reward profile unmatched by some competitors. This provides a targeted tool for sophisticated investors seeking short-term inverse exposure to gold mining equities. Its concentration on the NYSE Arca Gold Miners Index allows focused exposure to the gold mining sector. However, the leveraged nature makes it very risky and only suitable for short-term trading. The cost of holding the investment should also be factored in.

Volatility

GDXD exhibits very high volatility due to its leveraged and inverse nature. This is designed for short-term investment horizons.

Market Risk

Specific risks include counterparty risk associated with swap agreements, the volatility of the gold mining sector, and the potential for significant losses due to compounding and daily resets.

Ideal Investor Profile

GDXD is suited for sophisticated, active traders with a high-risk tolerance seeking short-term, tactical inverse exposure to gold mining equities.

Market Risk

GDXD is best suited for active traders with a short-term investment horizon; it is not suitable for long-term investors or passive index followers.

The MicroSectors Gold Miners -3X Inverse Leveraged ETNs (GDXD) provides -3x leveraged inverse exposure to the daily performance of the NYSE Arca Gold Miners Index. It is extremely volatile and designed for short-term trading strategies. Due to its leveraged nature and daily reset, it is unsuitable for long-term investment. Investors should understand the risks associated with leveraged and inverse products before investing in GDXD, and continuously monitor their positions.

Data Sources:

• REX Shares
• NYSE Arca
• Various Financial Data Providers

Disclaimers:

The data and analysis provided are for informational purposes only and do not constitute investment advice. Leveraged and inverse ETFs are complex financial instruments and carry a high degree of risk. Investors should conduct thorough research and consult with a financial advisor before investing.