Direxion Launches Leveraged ETFs for Healthcare, Materials
June 18th 2011 at 9:05am by Tom Lydon
Direxion has introduced four new 300% leveraged exchange traded funds that boost its sector lineup, and let investors take bullish and bearish positions on healthcare and basic materials. The asset manager has also listed an ETF that bets against the total U.S. stock market.
The firm’s latest funds are focused on sectors that are attracting assets or that have heavy trading volume.
Traders sometimes tap leveraged and bearish ETFs to profit from market pullbacks, or goose their long bets. The leverage, which in the new Direxion ETFs resets on a daily basis, also lets them make short-term trades while committing less capital, for example.
Most coverage of leveraged and inverse ETFs includes warnings that investment performance over periods longer than a day may not line up with the daily objective. Some ETFs are leveraged on a monthly rather than daily basis. [Don't Overlook ETF Risks]
The new ETFs are:
- Direxion Daily Basic Materials Bull 3X Shares (NYSEArca: MATL)
- Direxion Daily Basic Materials Bear 3X Shares (NYSEArca: MATS)
- Direxion Daily Healthcare Bull 3X Shares (NYSEArca: CURE)
- Direxion Daily Healthcare Bear 3X Shares (NYSEArca: SICK)
- Direxion Daily Total Market Bear 1X Shares (NYSEArca: TOTS)
“We understand that market direction matters, so we strive to offer an alternative to static investment strategies while delivering exposure to the various markets in which investors have high levels of interest, such as basic materials and healthcare,” said Direxion President Dan O’Neill in a press release. [A Slew of New ETF Launches.]
“Our 3x Daily Direxion leveraged funds offer magnified benchmark exposure for investors who actively manage their trading positions. Sophisticated investors can use them to take advantage of short-term market movements and opportunities, keeping in mind that these funds are designed to complement core investment strategies, not to replace them,” he added. [New Inverse Bond ETFs: A Sign of the Times.]
The asset manager added there will also be ticker changes to the following ETFs:
- Direxion Daily China Bull 3X Shares (NYSEArca: YINN) formerly CZN
- Direxion Daily China Bear 3X Shares (NYSEArca: YANG) formerly CZI
Tisha Guerrero contributed to this article.
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