Rounding out its line of leveraged exposure to Brazilian and South Korean markets, Direxion has launched two inverse exchange traded funds to help traders capitalize on any downside movements.
According to a press release, the Direxion Daily Brazil Bear 3x Shares (NYSEArca: BRZS) and Direxion Daily South Korea Bear 3x Shares (NYSEARca: KORZ) began trading Wednesday, May 1.
“We conduct market analysis and reviews on a constant basis in order to identify new opportunities in various regions and sectors for sophisticated investors who actively manage their trading positions,” Eric Falkeis, President of Direxion, said in the press release. “Brazil and South Korea are emerging markets with many successful commodity, technology and automobile companies.”
The Brazil Bear Fund will try to reflect the daily 3x inverse, or -300%, performance of the MSCI Brazil 25-50 Index, which is comprised of large- and mid-cap Brazilian stocks. BRZS has a 0.95% expense ratio.
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%, information technology 2.7% and health care 1.4%.
The South Korea Bear Fund tries to reflect the daily 3x inverse, or -300%, performance of the MSCI Korea 25-50 Index, which is comprised of large- and mid-cap South Korean stocks. KORZ has a 0.95% expense ratio.
Sector allocations include information technology 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%.
Leveraged ETFs try to magnify the daily movements of an underlying benchmark by using derivatives or futures contracts designed to generate a multiple of the return. Inverse ETFs also use derivatives in an attempt to achieve a negative, or inverse, multiplier to the direction of the underlying asset or index. [Inverse and Leveraged ETFs]
Due to daily rebalancing and compounding issues over time, the investments will not perfectly reflect the leveraged exposure to the underlying index over a long period.
Direxion launched the 3x bull versions last month, including the Direxion Daily Bull 3x Shares (NYSEArca: BRZU) and the Direxion Daily South Korea Bull 3x Shares (NYSEArca: KORU). [Direxion Launches Leveraged Brazil and South Korea ETFs]
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.