What JDST Shorts

JDST is designed to deliver daily investment results, before fees and expenses, that correspond to 200% of the inverse of the daily performance of the MVIS Global Junior Gold Miners Index (GDXJ).

It uses financial derivatives like swaps to achieve its 2x inverse leveraged exposure to a basket of small and mid-cap gold and silver mining companies.

Key Risks

• Leverage Risk: Daily resetting 2x leverage magnifies losses and causes volatility decay, especially in volatile or sideways markets.
• Compounding Risk: Designed for daily returns only; holding periods longer than one day can result in returns that diverge significantly from twice the inverse of the index's return.
• Sector Concentration Risk: Performance is tied to the volatile junior gold mining sector, which is sensitive to commodity prices, operational issues, and geopolitical events.
• Counterparty Risk: Relies on derivatives and swap agreements with financial institutions, exposing the fund to potential default.
• High Expense Ratio (1.08%): The cost of maintaining leverage is high and erodes returns over time.

Best Use Cases

• Short-term hedging for investors with a concentrated long position in junior gold mining stocks.
• Sophisticated traders making short-term tactical bets on a decline in the junior gold mining sector.
• As a portfolio hedge against a potential downturn in gold prices or mining equities for a day or two.
• Not suitable for long-term buy-and-hold investing due to compounding effects.

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Frequently Asked Questions