Direxion Funds is well known for its leveraged and inverse exchange traded funds that have grown tremendously popular among institutional managers as well as retail traders. However, near the end of 2011, in December to be exact, Direxion rolled out two products that are departures to the leveraged/inverse style and are instead focused on “insider sentiment.”
Direxion Large Cap Insider Sentiment Shares (NYSEArca: INSD) tracks the Sabrient Large Cap Insider/Analyst Quant Weighted Index and is essentially a subset of the S&P 500.
The index is designed to reflect positive sentiment among insiders of the represented equity names, and these insiders include company management, institutional holders and Wall Street based research analysts.
Currently, top holdings include Lincoln National (2.60%), MetLife (2.55%) and Valero Energy (2.50%) and the ETF is most heavily weighted in financials (22.12%) followed by energy (21.24%) and consumer discretionary (17.35%) at the moment.
While INSD is focused on the large cap space, thus the S&P-like composition, Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW) provides broader diversification by encompassing large, mid, and small cap names.
KNOW tracks the Sabrient Multi-Cap Insider/Analyst Quant Weighted Index which is a subset of the S&P 1500 and functions in a similar fashion as INSD as far as the composition of its index.
How have these two products fared since inception? Although the live track record is rather short being that these funds only debuted last December, the results thus far from a returns standpoint are certainly worth noting. KNOW is up 14.46% versus the S&P 1500 up 7.23% during the timeframe of 12/14/11 to present, and INSD has rallied 9.78% versus the S&P 500 up 6.71% during this same time period.
Neither fund trades heavy volume currently but based on the nature of the underlying equities in the indexes, they can be traded feasibly in larger sizes with the provided the proper techniques are applied.
Direxion All Cap Insider Sentiment Shares
For more information on Street One ETF research and ETF trade execution/liquidity services, contact pweisbruch@streetonefinancial.com.