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Put A Shine On These New Silver ETFs

September 23, 2016 1:56 pm
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Until recently, silver and the corresponding physically backed exchange-traded funds were among this year's best-performing members of the commodities asset class. So too have been silver miners ETFs.

In fact, some of the most well-known non-leveraged silver miners ETFs have spent considerable time this year delivering leveraged ETF-esque returns. But those funds have succumbed to profit taking in recent weeks, indicating that at least one new leveraged ETF could get off to a fast start: The Direxion Daily Silver Miners Index Bear 2X Shares (Direxion Funds ETF (NYSE: DULL)).

DULL, which made its debut last Thursday, extends Direxion's tradition of memorable tickers and attempts to deliver double the daily inverse returns of the Solactive Global Silver Miners Index.

“The Solactive Global Silver Miners Index is designed to measure broad based equity market performance of companies involved in the silver mining industry, as defined by Structured Solutions AG. The Index includes a minimum of 20 and a maximum of 40 stocks of U.S. and foreign companies active in exploration, mining and/or refining of silver, including stocks of small- and medium- capitalization companies. Index adjustments are carried out semi-annually,” according to Direxion.

Of course, DULL has a bullish cousin for the risk-tolerant trader willing to bet on a short-term rebound for silver miners, the Direxion Daily Silver Miners Index Bull 2X Shares (NYSE: SHNY). SHNY attempts to deliver double the daily returns of the Solactive Global Silver Miners Index.

Given the aforementioned profit taking that silver miners ETFs have been subjected to, SHNY could also be worth a look right out of the gate.

“Silver’s shrinking price over the past several years forced silver miners to innovate to drive production costs down. Now that prices are rebounding, those cost reductions are paying off in a big way,” said Sylvia Jablonski, Managing Director at Direxion, in a statement. “The launch of the Silver Miners leveraged and inverse ETFs is timely, as the funds allow traders to magnify their short-term perspective on one of the most popular metal and related-asset trades.”

Top holdings in the index tracked by DULL and SHNY include Silver Wheaton Corp. (NYSE: SLW), Fresnillo PLC and Pan American Silver Corp. (NASDAQ: PAAS). Those stocks combine for about 36 percent of the index's weight.

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