5 Top ETFs to watch
Placing bets on the bottom
The Market Vectors Gold Miners ETF (GDX) should be nicknamed the Paradox for its posting of lousy returns while attracting lots of new money. GDX closed at $23.05 on Oct. 11 — the third-lowest price in its history and its second-lowest price in five years. On that same day a continued influx of money led the ETF to a record high of 299 million shares outstanding, the 14th-highest among all ETFs.
Some of those shares outstanding could have been bought by market-makers to lend to investors that want to short GDX, but much of it is likely investors trying to call a bottom. GDX has underperformed virtually everything this year, losing 42 percent, and has been spinning out of control for over two years. Gold miners have struggled for reasons including a drop in gold's price, subdued inflation expectations and worse-than-expected miner profitability, according to Bloomberg Industries.
Any speculator that calls the bottom correctly could make a killing, but no one has pulled it off yet. That said, since Oct. 11, GDX is up 14 percent.