Direxion, the second-largest issuer of inverse and leveraged exchange traded funds, said it will close five of its triple-leveraged bearish ETFs due to low assets under management tallies across the quintet.
“Due to the Funds’ inability to attract sufficient investment assets, Rafferty believes they cannot continue to conduct their business and operations in an economically efficient manner. As a result, the Board concluded that liquidating and shuttering the Funds would be in the best interests of the Funds and their shareholders,” said Rafferty Asset Management, LLC, the advisor to Direxion Shares ETF Trust, in a statement issued Tuesday.
The five ETFs being shuttered are as follows: The Direxion Daily Brazil 3x Bear Shares (NYSEArca: BRZS), Direxion Daily FTSE Europe Bear 3x Shares (NYSEArca: EURZ), Direxion Daily Japan 3x Bear Shares (NYSEArca: JPNS), Direxion Daily Korea 3x Bear Shares (NYSEArca: KORZ) and the Direxion Daily Natural Gas Related Bear 3X Shares (NSYEArca: GASX).
“Shares of the Funds will stop trading on the NYSE Arca, Inc., and will no longer be open to purchase by investors, at the close of regular trading on September 23, 2014. On September 29, 2014, the Funds will liquidate their assets and distribute cash pro rata to shareholders who have not previously redeemed or exchanged their shares,” according to the statement.
Even with the closures, Direxion maintains a vibrant lineup of popular and heavily traded leveraged ETFs, including the Direxion Daily Gold Miners Bull 3X Shares (NYSEArca: NUGT), Direxion Daily Financial Bear 3X Shares (NYSEArca: FAZ) and the Direxion Daily Gold Miners Bear 3X Shares (NYSEArca: DUST), among others.