Investors who have the trade war blues can seek long-term exposure to popular broad-based markets without the jet-fueled leverage of 200% or 300% of an index via the Portfolio Plus ETFs by Direxion to get that dash of extra exposure on a daily basis. What’s the top performer thus far in this suite of ETFs thus far?
With a 17 percent gain thus far this year, it’s the PortfolioPlus S&P 500 ETF (NYSEArca: PPLC). PPLC seeks daily investment results that equate to 125% of the daily performance of the S&P 500.
The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.
For traders who are accustomed to using 2x and 3x leverage, heavy doses of volatility for buy-and-hold investors might have them hesitant to jump back into these products. Portfolio Plus ETFs can still give these investors the extra exposure that they seek, but the added downside protection with less exposure.
“Spikes in volatility levels can impact returns on a fund’s portfolio,” Direxion noted in an article. “The relatively low leverage point (1.25X) for PortfolioPlus ETFs provides less impact of negative compounding than highly leveraged ETFs, making them potentially more suitable for long-term investors.”
Other PortfolioPlus ETFs to consider:
- PortfolioPlus S&P Mid Cap ETF (NYSEArca: PPMC): PMC seeks daily investment results equal to 125% of the daily performance of the S&P Mid Cap 400® Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in equities in the index, exchange-traded funds (“ETFs”) that track the index and other financial instruments that provide daily leveraged exposure to the index. The index measures the performance of 400 mid-sized companies in the United States.
- PortfolioPlus S&P Small Cap ETF (NYSEArca: PPSC): PPSC seeks daily investment results that comprise 125% of the daily performance of the S&P SmallCap 600® Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in securities of the index, exchange-traded funds (“ETFs”) that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index measures the performance of 600 small-capitalization companies in the U.S. It is a float-adjusted market capitalization weighted index.
- PortfolioPlus Developed Markets ETF (NYSEArca: PPDM): PPDM seeks daily investment results equal to 125% of the daily performance of the FTSE Developed All Cap ex US Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in equities in the index, exchange-traded funds (“ETFs”) that track the index and other financial instruments that provide daily leveraged exposure to the index. The index is a market-capitalization weighted index representing the performance of large-, mid- and small-capitalization companies in developed markets, excluding the USA.
- PortfolioPlus Emerging Markets ETF (NYSEArca: PPEM): PPEM seeks daily investment results equal to 125% of the daily performance of the FTSE Emerging Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in equities in the index, exchange-traded funds (“ETFs”) that track the index and other financial instruments that provide daily leveraged exposure to the index. The index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.
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