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Why DUST Is Poised to Pull Back

By Brian D. Pacampara, CFA - Apr 22, 2013 at 5:29PM

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Market-lagging returns could be written in this 1-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Direxion Daily Gold Miners Bear 3x Shares (NYSE: DUST) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at DUST and see what CAPS investors are saying about the ETF right now.

DUST facts

 

 

Inception

December 2010

Total Net Assets

$87.7 million

Investment Approach

The investment seeks daily investment results of 300% of the inverse (or opposite) of the performance of the NYSE Arca Gold Miners Index. The index is a modified market capitalization weighted index comprised of publicly traded companies that operate globally in both developed and emerging markets, and are involved primarily in the mining for gold and silver.

Expense Ratio

1.01%

3-Month / Year-to-Date / 1-Year Returns

207.4% / 226.7% / 111.4%

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 87% of the 165 members who have rated DUST believe the ETF will underperform the S&P 500 going forward.

Just last week, one of those bears, fellow Fool Matthew Argersinger (TMFMattyA), touched on DUST's seemingly unsustainable price run:

This thing has rocketed to the moon recently thanks to gold miners who are getting killed as the price of gold plummets. This is a bit of a contrarian bet that gold and the miners find a bottom and the 3x leverage this ETF uses starts eating it alive.

 Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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