Exchange traded fund providers typically partner with a reputable index provider to create fund products that provide the best exposure to a targeted market. Direxion Shares, a provider known for its inverse and leveraged ETF vehicles, recently swapped out the underlying indices on eight of its funds in favor of Standard & Poor’s benchmarks.
According to a press release, effective on or about June 29, the following eight ETFs, which currently track Russell 1000 and mid-cap Indices, will begin tracking S&P indices, along with trading under minor changes to fund names and ticker symbols:
- Direxion Daily S&P 500 Bull 3X Shares (NYSEArca: SPXL). SPXL will try to reflect the daily 300% performance of the S&P 500 Index and replace the Direxion Daily Large Cap Bull 3X Shares (NYSEArca: BGU).
- Direxion Daily S&P 500 Bear 3X Shares (NYSEArca: SPXS). SPXS will try to reflect the daily -300% performance of the S&P 500 and replace the Direxion Daily Large Cap Bear 3X Shares (NYSEArca: BGZ).
- Direxion Daily Mid Cap Bull 3X Shares (NYSEArca: MIDU). The fund will try reflect the daily 300% return of the S&P Mid Cap 400 Index. MIDU will also replace the MWJ ticker symbol.
- Direxion Daily Mid Cap Bear 3X Shares (NYSEArca: MIDZ). The fund will reflect the daily -300% return of the S&P Mid Cap 400 Index. MIDZ replaces the MWN ticker symbol.
- Direxion Daily Technology Bull 3X Shares (NYSEArca: TECL). The ETF will follow the daily 300% return of the Technology Sector Index. It currently trades under TYH.
- Direxion Daily Technology Bear 3X Shares (NYSEArca: TECS). The ETF will follow the daily -300% return of the Technology Sector Index. It currently trades under TYP.
- Direxion Daily Energy Bull 3X Shares (NYSEArca: ERX). The ticker symbol will remain the same. ERX will reflect the 300% return of the Energy Select Sector Index.
- Direxion Daily Energy Bear 3X Shares (NYSEArca: ERY). The ticker symbol will remain the same. The fund will track the -300% return of the Energy Select Sector Index.
“We are very pleased to expand our relationship with Standard & Poor’s, whose market indices have long been among the leaders in the industry,” Dan O’Neill, Direxion’s President and Chief Investment Officer, said in the press release. “We feel that these S&P indices provide our investors with the most recognizable exposure to these underlying markets.”
Potential investors should note that inverse/leverage ETFs are meant for short-term hedging since the funds rebalance on a daily basis. As a result of compounding issues, the funds may not reflect their respective leverages to the long-term performance of the underlying assets.
For more information on the ETF industry, visit our current affairs 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.