# BMO Junior Gold Index ETF (ZJG.TO)



## zylon (Oct 27, 2010)

> BMO Junior Gold Index ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones North America Select Junior Gold Index, net of expenses. The Fund invests in and holds the constituent securities in the same proportion as they are reflected in the Index. ~source


ZJG top holdings

GDXJ (in Cdn dollar terms) and ZJG are showing similar performance.
comparison chart (weekly)

Some discussion on this topic has already taken place.
http://www.canadianmoneyforum.com/showpost.php?p=75010&postcount=5

http://www.canadianmoneyforum.com/showpost.php?p=75035&postcount=10

http://www.canadianmoneyforum.com/showpost.php?p=75052&postcount=12


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## humble_pie (Jun 7, 2009)

this is interesting, i hadn't realized that zjg is indeed gdxj.

gdxj has options. These are US options. Because option contracts are drawn for 100 share lots, it looks like 200 shares of zjg would need to be purchased to cover every call contract of gdxj that would be sold. This would provide an oversheltering of the underlying, but there would be no alternative. An oversupply of the underlying would always be preferable to an undersupply, if any assignment were to occur.

the usefulness of all this might increase if investor were also bullish on the US dollar. Essentially in a covered write he'd be buying now in CAD but locking in a future & higher price in USD whose exchange rate might be more favourable than it is at present.

the tricky detail is that the deliverables are not the same, therefore assignment would mean one extra step for the investor setting up a cross-border covered write. If his future call in gdxj were to be assigned, he'd have to sell his zjg at market price in canada, then buy gdxj at market price in the US in order to be able to deliver it.


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