Direxion launches inverse & leveraged ‘Magnificent Seven’ ETFs

Mar 12th, 2024 | By | Category: Equities

Direxion has introduced a pair of new tactical ETFs focused on leading technology companies in the United States.

Direxion launches inverse & leveraged ‘Magnificent Seven’ ETFs

The “Magnificent Seven” refers to a subset of prominent US technology-enabled companies.

The Direxion Daily Concentrated Qs Bear 1X Shares (QQQD US) and Direxion Daily Concentrated Qs Bull 2X Shares (QQQU US) have been listed on Nasdaq with expense ratios of 0.57% and 1.07%, respectively.

QQQD and QQQU offer inverse (-100%) and twice (+200%) the daily return, respectively, of the Indxx Front of the Q Index.

The underlying index consists of a portfolio of prominent US technology and technology-enabled stocks which together are commonly referred to as the “Magnificent Seven”: Apple, Amazon.com, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla.

Collectively, the seven companies, which represent the largest constituents of the Nasdaq 100, boast a total market capitalization exceeding $13 trillion, surpassing that of Japan, France, and the UK stock markets combined (data as of mid-February 2024).

The index rebalances its portfolio to equal weights every quarter, ensuring a balanced representation across its underlying constituents.

Edward Egilinsky, Managing Director and Head of Sales and Alternatives at Direxion, commented: “QQQU and QQQD capitalize on key market drivers, to include artificial intelligence, cloud computing, and semiconductors. These funds offer traders a unique opportunity to express their short-term conviction on the top seven companies in the Nasdaq 100 by market capitalization.”

Investors should note that inverse and leveraged ETFs are only suitable for sophisticated traders who understand the risks involved. Specifically, these products tend to decay in value if held for an extended period, potentially leading to significant losses, especially in volatile but range-bound markets.

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