About Nugt and Nugt Trading
The Direxion Daily Gold Miners Index Bull (NUGT) is a leveraged ETF designed to return three times the performance of the NYSE Arca Gold Miners Index on a day to day basis. However, you should always keep in mind that there is no guarantee the funds will meet their stated investment objective. As a levered product, NUGT is perceived as a short-term tactical instrument. The fund rebalances daily. Over more extended periods, returns can vary significantly from 3x exposure to its underlying Index.
The NYSE Arca Gold Miners Index is a market capitalization-weighted index made of publicly-traded companies operating globally in developed and emerging markets and are involved primarily in mining for gold and, to a lesser extent, in mining for silver. The Index will limit companies' weight whose revenues are more significantly exposed to silver mining to less than 20% of the Index at each rebalance date. The Index may include small- and mid-capitalization companies and foreign issuers.
What is a leveraged ETF?
A leveraged exchange-traded fund (ETF) defines a type of financial product created for tracking an underlying index at higher rates of return. Such instruments can offer returns as high as two or three times the returns of a traditional ETF but at increased risks.
Leveraged ETFs cover the Underlying Index's securities and include derivatives of the securities and the Index itself. These derivatives can be options, forward contracts, swaps, and futures. In other words, leveraged ETFs can be tied to different industry sectors, commodities, or currencies, just as regular ETFs can be.