Direxion launches triple leveraged & inverse ETFs on high beta and internet stocks

Nov 11th, 2019 | By | Category: Alternatives / Multi-Asset

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Direxion has added two pairs of funds to its line-up of leveraged and inverse ETFs.

Dave Mazza Direxion

Dave Mazza, Managing Director at Direxion.

The ETFs provide triple leveraged exposure and triple inverse leveraged exposure to the daily return of high beta stocks and internet companies within the US large-cap equity universe.

High beta stocks

The Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL US) returns 300% of the daily performance of the S&P 500 High Beta Index.

The index provides exposure to 100 stocks from the S&P 500 Index with the highest sensitivity, or beta, over the last 12 months. Constituents within the index are weighted by their betas. The fund comes with an expense ratio of 1.12%.

The Direxion Daily S&P 500 High Beta Bear 3X Shares (HIBS US) returns 300% of the inverse daily performance of the S&P 500 High Beta Index. It comes with an expense ratio of 1.07%.

Internet companies

The Direxion Daily Dow Jones Internet Bull and Bear 3X Shares (WEBL US) returns 300% of the daily performance of the Dow Jones Internet Composite Index.

The index tracks the performance of the 40 largest and most actively traded stocks of US internet technology and commerce companies, offering a broad selection of internet companies not based on traditional GICS sector definitions.

To be eligible for selection, a company must derive at least 50% of its revenue from internet-related activities. Constituents are weighted by float-adjusted market capitalization subject to a single stock cap of 10%. It comes with an expense ratio of 1.17%.

The Direxion Daily Dow Jones Internet Bull and Bear 3X Shares (WEBS US) returns 300% of the inverse daily performance of the Dow Jones Internet Composite Index. It comes with an expense ratio of 1.07%.

Dave Mazza, Managing Director at Direxion, commented, “We’re very excited to offer traders leveraged exposure to these two indexes to express bullish or bearish positions. These leveraged ETFs allow traders to take bold positions in stocks that either have high betas to the market or are focused on the internet industry.”

Inverse & leveraged funds can provide an efficient means for sophisticated traders to obtain tactical exposures; however, they are generally considered unsuitable for retail investors who may not fully understand the risks involved.

The funds tend to decay in value if held for an extended period of time, potentially leading to significant losses especially in volatile but range-bound markets. This characteristic generally increases with the degree of leverage involved.

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