Institutional managers may also use funds such as TZA to hedge core long exposure that they may have in U.S. equities, and since these daily leveraged funds have implications caused by daily compounding effects and the leverage is reset daily, adept management and rebalancing of the hedges is crucial in order to achieve desired results.
Since its inception in November of 2008, TZA has amassed nearly $1 billion in assets, and trades a very heavy amount of volume on a daily basis (approximately 27 million shares currently), so it is clear that the fund has gained appeal from both the retail trading community and aggressive speculators as well as larger institutional managers who may be hedging overall portfolio exposures and/or using the fund for short term “bearish” trading.
TZA was up more than 2% on Monday.
Direxion Daily Small Cap Bear 3X
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