Direxion launched the actively managed Direxion HCM Tactical Enhanced US ETF (NYSE Arca: HCMT) on the New York Stock Exchange. HCMT seeks to provide enhanced returns across multiple market cycles that are broadly correlated to the U.S. equity markets.
HCMT attempts to outperform the major U.S. equity indices during market upswings by using derivatives. Meanwhile, it seeks to minimize losses during downward market trends through investments in cash, or cash equivalents.
“Direxion has been a pioneer in the ETF space using derivatives,” said Todd Rosenbluth, head of research at VettaFi. “The new products take a unique approach by providing exposure to broad equity markets as well as sectors based on technical indicators.”
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A Powerful Solution to Navigating Volatility
The fund uses a quantitative investment model developed by its subadvisor Howard Capital Management to attempt to minimize loss and maximize gains across all market conditions.
HCM’s CEO and portfolio manager Vance Howard described tactical management as “a powerful, straightforward solution to navigating market volatility.”
“Our disciplined, rules-based approach takes the emotion out of investing and allows us to be strategic and tactical with equity markets that do not think or feel,” he added.
HCMT’s tactical strategy provides enhanced equity exposure during periods of market uptrends, offering the potential for higher risk/reward. While the fund’s strategy is aggressive, HCMT takes a disciplined approach to equity investing.
Direxion’s head of sales and alternatives Edward Egilinsky said Direxion and HCM “proved a natural fit for collaboration.” Direxion provides the “expertise in providing trading tools for tactical money managers.” Meanwhile, HCM “utilizes leveraged products within their strategies in their attempt to generate alpha.”
HCMT carries net expense ratio of 1.15%.
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