GDXU, 3x Leveraged Gold ETN, Jumps 13% in Early July

GDXU, the MicroSectors Gold Miners 3X Leveraged ETN, climbed about 13% in early July, according to YCharts. The note provides three times the daily exposure to a market-cap-weighted index that includes the VanEck Gold Miners ETF (GDX) and the VanEck Junior Gold Miners ETF (GDXJ).

The ETN tracks the S-Network MicroSectors Gold Miners Index and carries an annual fee of 95 basis points. The index combines large- and small-cap gold-miner ETFs to reflect miner share performance rather than bullion prices alone.

Gold was down roughly 4% year-to-date before a modest uptick in early July. That uptick coincided with GDXU’s gain at the start of the month.

GDXU is structured to deliver three times the daily returns of its underlying index. The note’s daily reset means returns compound differently than unleveraged funds over multi-day periods. Product documentation indicates the ETN is intended for short-term, active trading rather than a buy-and-hold strategy.

GDXU has an inverse counterpart, the MicroSectors Gold Miners -3X Inverse Leveraged ETN (GDXD), which charges the same 95 basis points and seeks the opposite of the daily returns of the same underlying ETFs. Through early July, GDXD moved about 13% lower while GDXU rose.

VettaFi LLC is the index provider for the S-Network MicroSectors Gold Miners Index and receives an index licensing fee related to GDXU and GDXD. VettaFi is not the issuer, sponsor, endorser or seller of the ETNs and states it has no obligation or liability in connection with their issuance, administration, marketing or trading.