On Thursday, Direxion announced the launch of two new leveraged ETF offerings focused around mining and metals and also technology software. Both are two times leveraged bull positions on the industries they invest in and as such means that investors should have a firm understanding of the risks associated with leveraging before investing in them.
Mining and Metals
The Direxion Daily Metal Miners Bull 2X Shares ETF (MNM) seeks to offer investors 200% of the daily performance of the S&P Metals and Mining Select Index, an index that contains companies involved in metal extraction and other natural resources but does not contain metal commodities. Companies included mine the following metals and resources: copper, aluminum, gold, precious metals and minerals, silver, steel, diversified metals, and coal and consumable fuels.
“The 5-year, $973B infrastructure plan provides a massive boost to government development. This includes transportation, roads, bridges, passenger and freight rail, public transit, EVs, the electricity grid, broadband, and clean water,” said David Mazza, managing director, head of product at Direxion in the press release for MNM. “As this development continues to evolve, along with an uptick in volatility, the metals and mining industry is one traders may want to consider.”
MNM carries an expense ratio of 1.07% and at launch, the top holdings in the index are as follows:
Image source: Direxion Press Release
Tech Software
The Direxion Daily Software Bull 2x Shares ETF (SWAR) seeks to offer investors 200% of the daily performance of the S&P North American Expanded Technology Software Index. The index contains companies in the U.S. and Canada that are working in application software, systems software, as well as home entertainment software sub-industries.
The index weights securities by their float-adjusted market cap, with no single security greater than 8.5%, and anything with more than a 4.5% weighting cannot collectively make up more than 45% of the index.
“Software remains an important part of the information technology sector. At this point in technological development software is ubiquitous to the point no one thinks about it, considering it is everywhere and anywhere,” said David Mazza, managing director, head of product at Direxion in the press release for the ETF. “As this development continues to evolve, along with an uptick in volatility, the application, systems, and home entertainment software industry is one traders may want to consider.”
SWAR carries an expense ratio of 1.07% and at launch, the top holdings in the index are as follows:
Image source: Direxion Press Release
