This ETF Has More Zip than Tesla

By
A A A

The stock price for Tesla Motors (NasdaqGS:TSLA) has been a rocket ship, but one ETF has more zip.

The Direxion Daily Gold Miners Bear 3x Shares (NYSEARCA:DUST) is beating the year-to-date (YTD) performance of Tesla by more than 100%* and has posted a gain of more than 250%. 

The bear market in gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV) prices has crushed mining stocks, which has resulted in mammoth gains for bears.

DUST aims for triple daily inverse or opposite performance to mining stocks (NYSEARCA:XME). That means if mining stocks fall by 1% in a single trading session, DUST should be up 3% or close to it.

The relative performance differential between mining stocks and the S&P 500 (NYSEARCA:SPY) is especially staggering. While the S&P is ahead by 12.53% YTD, the Market Gold Miners ETF (NYSEARCA:GDX) is down more than 40%. Also, gold miners have substantially underperformed physical bullion.

DUST is an ETF that's familiar to our readers.  

In our Weekly ETF Picks from February 14, we warned about deep trouble in the precious metals market and a high profit opportunity on the short side.  

We wrote:

"A double digit slide for gold would likely translate into a 20%+ loss in mining stocks. This scenario offers some big upside potential for bears."

Since then, DUST has surged more than 170% in value.


ETFs that use 200% (2x) and 300% (3x) are best used as short term trading instruments, rather than buy-and-hold investments.

Our latest video, " Tips for Making Short and Leveraged ETFs Working for You ," explains some of the key differences between these types of funds versus ETFs that don't attempt to magnify performance. 

Follow us on Twitter @ ETFguide

*Through the market close of May 17, 2013



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks:

ETFguide

ETFguide

More from ETFguide:

Related Videos

How to Fire Your Adviser
How to Fire Your Adviser            

Stocks

Referenced

Most Active by Volume

75,750,465
  • $16.77 ▲ 0.36%
59,791,764
  • $101.58 ▲ 0.71%
38,720,622
  • $42.59 ▼ 0.28%
37,416,417
  • $46.52 ▼ 0.51%
35,101,793
  • $16.28 ▲ 0.74%
34,987,975
  • $99.53 ▲ 0.15%
33,760,830
  • $3.63 ▲ 0.69%
32,148,671
  • $17.61 ▲ 0.57%
As of 9/17/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com