Gold Miner ETFs Are Having the Rally of a Lifetime and Burned Investors are Missing It

Referenced by Jordan at The Daily Gold in his review of "Gold Stocks Climbing Epic Wall of Worry".......more

Despite returns of more than 65 percent in a year when the S&P 500 is up 4 percent, gold miner ETFs have seen half a billion in outflows. That is practically unheard of as inflows and performance are usually highly correlated when it comes to ETFs.......This oddity is no doubt connected to the billions that were poured into GDX over the past several years as investors bloodied their hands trying to catch a falling knife. GDX had lost 75 percent in the three years leading up to 2016......JNUG is returning four times the returns of its underlying index due to the compounding effect of resetting leverage daily into a upward-moving market. No ETF has ever returned more than 300 percent in a year. Yet JNUG has still seen $83 million in outflows.

As Jordan comments

The fact is when a devastating bear market finally gives way to a new bull most investors and even those with a bullish bias are either outright incredulous or simply decide to wait for the inevitable correction. The problem is the correction never comes or when it does come, it is smaller than expected and the buying opportunity evaporates quickly and instantly. 

The chart might give hope that a correction is due....