Today in our morning note to trading clients we note the launch of a suite of “Lightly Levered” products from Direxion, an ETF issuer that now has fifty five ETFs listed in the U.S. marketplace.
Most know of the company vis a vis their trademark “3X” leveraged Bull/Bear products that are designed as short term directional trading vehicles, and it is no surprise that the largest fund of theirs at the moment happens to be one of these 3X offerings, FAS (Direxion Daily Financial Bull 3X Shares, Expense Ratio 0.95%), which has about $1.3 billion in assets under management currently.
Not nearly as large in asset size but seemingly more popular with traders are TNA (Direxion Daily Small Cap Bull 3X Shares, Expense Ratio 0.95%) and NUGT (Direxion Daily Gold Miners Bull 3X Shares, Expense Ratio 0.95%) and TZA (Direxion Daily Small Cap Bear 3X Shares, Expense Ratio 0.95%) which average 8.4 million shares, 15 million shares, and 18.4 million shares respectively on an average daily basis.
Direxion has also attempted to make a mark in corners of the ETF market outside of Daily levered Bull and Bear strategies, as evidenced with funds such as ZMLP (Direxion Zacks MLP High Income Shares, Expense Ratio
0.65%, $46 million in AUM), KNOW (Direxion All Cap Insider Sentiment Shares, Expense Ratio 0.65%, $40 million in AUM), IBLN (Direxion iBillionaire Index, Expense Ratio 0.65%, $35 million in AUM), and VSPY (Direxion S&P 500 Volatility Response Shares, Expense Ratio 0.45%) to name a few.
The newly launched “Lightly Levered” ETFs, which incorporate 1.25X daily leverage, are LLSP (Direxion Daily S&P 500 Bull 1.25X Shares, Expense Ratio 0.50%), LLSC (Direxion Daily Small Cap Bull 1.25X Shares, Expense Ratio 0.50%), LLDM (Direxion Daily FTSE Developed Markets Bull 1.25X Shares, Expense Ratio 0.50%), and LLEM (Direxion Daily FTSE Emerging Markets Bull 1.25X Shares, Expense Ratio 0.50%), and we imagine that some additional offerings may be in the works but first the issuer will test the marketplace with these first, understandably.