Direxion unveils triple leveraged & inverse ETFs for US consumer sectors

Dec 4th, 2018 | By | Category: ETF and Index News

Direxion has added four funds to its line-up of leveraged and inverse sector ETFs.

Bull Bear Direxion Leveraged Inverse ETFs

The funds are well suited for investors with strong bullish or bearish sector views.

The funds provide triple leveraged exposure or triple inverse leveraged exposure to the daily return of the consumer staples and consumer discretionary sectors of the US equity market.

The new ETFs reflect recent Global Industry Classification Standard (GICS) sector changes that were implemented by S&P Dow Jones in September 2018.

Under the new GICS structure, the Telecommunication Services sector expanded to include telecommunication companies and select companies from the Consumer Discretionary and Information Technology sectors. It was subsequently renamed the Communication Services sector.

Consumer Discretionary, which no longer includes media and entertainment companies, continues to primarily offer exposure to retailers, including Amazon and Home Depot.

According to Direxion, the sector remains an attractive option for growth investors due to its continued exposure to stocks with relatively high expected earnings and sales growth.

Consumer Staples, on the other hand, retains a strong orientation toward value stocks with exposure to companies considered to be more essential to daily living, such as Procter & Gamble and Coca-Cola.

The four new funds are outlined below:

Direxion Daily Consumer Discretionary Bull 3X Shares (WANT US)
Direxion Daily Consumer Discretionary Bear 3X Shares (PASS US)

Direxion Daily Consumer Staples Bull 3X Shares (NEED US)
Direxion Daily Consumer Staples Bear 3X Shares (LACK US)

“The retail-oriented WANT and PASS allow traders to take bold positions on consumer discretionary stocks, while NEED and LACK will do the same for those looking for leveraged trades on today’s consumer staples stocks,” said David Mazza, Managing Director and Head of Product at Direxion.

The leveraged funds (WANT & NEED) come with expense ratios of 1.01%, while the inverse leveraged ETFs (PASS & LACK) charge 0.97%.

Inverse & leveraged funds 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, hence the 300% leverage of the new funds highlight their unsuitability as buy-and-hold investments.

Direxion offers a diverse range of triple leveraged & inverse sector ETFs. In addition to the new consumer-focused ETFs, the line-up includes funds that target firms operating within the healthcare, energy, real estate, financials, technology, industrials, and utilities sectors, as well ETFs that home in on more specific industries such as gold mining, natural gas, oil & gas exploration, retail, regional banks, semiconductor, biotech, aerospace & defence, transportation, pharmaceuticals, and robotics & artificial intelligence.

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