Despite hitting a low earlier this month, gold miner exchange traded funds have attracted greater interest among bargain hunters trying to time the bottom in the underperforming sector.
However, on the same day, the fund attracted $8.1 billion in assets, according to IndexUniverse data, and hit a record high 299 million shares outstanding, the 14th-highest among all ETFs.
While some of the interest may be attributed to market-makers lending shares to investors for short selling, the uptick in interest is more likely a result of investors trying to call a bottom.
Additionally, there may be some tailwind that could help propel gold miners. For instance, the falling U.S. dollar provides a boost for gold assets, both miner stocks and gold are beginning to move in tandem and earnings estimates are stabilizing, writes Daniel Putnam for InvestorPlace.
GDX has lagged behind physical gold prices, declining 42.8% year-to-date, compared to the 19.4% fall in SPDR Gold Shares (GLD) so far this year.
Investors have exited GLD in droves this year, pulling $22.1 billion out of the physical gold ETF this year. On the other hand, GDX has attracted $2.3 billion in assets year-to-date.
Market Vectors Gold Miners ETF
Max Chen contributed to this article.
Full disclosure: Tom Lydon's clients own GLD.