ETF Trends
ETF Trends

Direxion Funds is on a roll, after a successful year with their triple-leveraged and inverse exchange traded funds (ETFs), word is that they have filed to launch 40 new funds with the Securities and Exchange Commission (SEC).For these new funds, the provider is adding a twist to their exotic line-up of inverse and leveraged ETFs. While the fund provider proposes to still offer 200% and 300% leverage to different major indexes, it’s moving to expand the time each new portfolio compounds returns, reports Murray Coleman for Index Universe.

Previously, the company used daily returns to calculate a fund’s performance, and the new twist will track monthly prices within their underlying benchmarks. Theoretically, this should help investors hold the ETFs for a longer period of time, assuming the fund is held throughout the month, from the beginning, not the end.

Re-balancing techniques used by Direxion aren’t likely to completely smooth short-term differences between benchmark and fund returns, Coleman points out. Daily deviations are bound to occur. The objective is to hold monthly returns while trading the dailies around those.

A few of the ETFs from the provider already in the lineup and trading are:

  • Direxion Large Cap Bull 3x Fund (BGU): down 28.3% year-to-date

  • Direxion Financial Bear 3x Fund (FAZ): down 47.8% year-to-date

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.