Direxion Launches Leveraged Brazil and South Korea ETFs
April 11th at 4:30pm by Tom Lydon
Emerging market equities offer investors risky and potentially lucrative returns. Direxion, an exchange traded fund provider known for its inverse and leveraged offerings, is upping the ante for exposure to Brazil and South Korea.
According to a press release, the Direxion Daily Bull 3x Shares (NYSEArca: BRZU) and the Direxion Daily South Korea Bull 3x Shares (NYSEArca: KORU) began trading Wednesday, April 10.
“Brazil and South Korea are emerging markets with many successful commodity, technology and automobile companies,” Eric Falkeis, President of Direxion, said in the press release. “Direxion is allowing investors to not only obtain more surgical exposure to these booming economies, but also to leverage their performance through innovative investment products.”
BRZU will try to reflect the 300% daily performance of the MSCI Brazil 25/50 Index, which includes large- and mid-cap Brazilian stocks. The ETF has a 0.95% expense ratio. [Brazil ETFs Gaining Momentum After Government Stimulus]
Sector allocations include financials 26.2%, materials 17.8%, consumer staples 15.0%, energy 13.7%, utilities 7.4%, industrials 6.2%, consumer discretionary 5.6%, telecom services 4.0%, info tech 2.7% and healthcare 1.4%.
KORU will try to reflect the 300% daily performance of the MSCI Korea 25/50 Index, which tracks large- and mid-cap South Korean stocks. The fund has a 0.95% expense ratio. [ETF Chart of the Day: South Korea]
Sector allocations include information tech 30.9%, consumer discretionary 17.5%, financials 15.1%, industrials 13.8%, materials 10.8%, consumer staples 5.4%, energy 3.1%, utilities 1.7%%, telecom services 0.9% and health care 0.9%.
“The fund should not be expected to provide three times the return of the benchmark’s cumulative return for periods greater than a day,” according to the Direxion’s description of both funds.
Leveraged ETFs provide aggressive exposure to daily movements of a benchmark index. Due to its daily rebalancing and compounding issues over time, the investments will not perfectly reflect the leveraged exposure over a long period.
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.