Direxion, one of the largest issues of inverse and leveraged exchange traded funds, said it plans to close 12 of its inverse and leveraged sector funds.
“Shares of each Fund will stop trading on the NYSE Arca, Inc., and will no longer be open to purchase by investors, after the close of regular trading on September 25, 2017,” according to a statement. “Shareholders may sell their holdings in each Fund prior to the Closing Date and customary brokerage charges may apply to these transactions. However, from September 26, 2017 through October 2, 2017 (the “Liquidation Date”), shareholders may only be able to sell their shares to certain broker-dealers and there is no assurance that there will be a market for each Fund’s shares during this time period.”
The closures include the Direxion Daily Consumer Staples Bear 1X Shares (NYSEArca: SPLZ) and Direxion Daily Utilities Bear 1X Shares (NYSEArca: UTLZ), which debuted earlier this year.
The Direxion Daily Energy Bear 1X Shares (ERYY), Direxion Daily Financial Bear 1X Shares (FAZZ), Direxion Daily Gold Miners Index Bear 1X Shares (MELT) and the Direxion Daily MSCI European Financials Bear 1X Shares (EUFS) are also slated to be closed.
Another pair of inverse though not leveraged funds, the Direxion Daily S&P Biotech Bear 1X Shares (LABS) and the Direxion Daily Technology Bear 1X Shares (TECZ), are also being closed.
Leveraged ETFs to be closed by Direxion include the following: The Direxion Daily Cyber Security & IT Bull 2X Shares (HAKK), Direxion Daily Silver Miners Index Bear 2X Shares (DULL), Direxion Daily Healthcare Bear 3X Shares (SICK) and the Direxion Daily Homebuilders & Supplies Bear 3X Shares (CLAW).
“Due to the Funds’ inability to attract sufficient investment assets, Rafferty believes the Funds cannot continue to conduct their business and operations in an economically efficient manner. As a result, the Board determined that liquidating and closing the Funds would be in the best interest of each Fund and its shareholders,” according to the statement.