On Thursday, Direxion Funds launched the Direxion Moonshot Innovators ETF (MOON). MOON invests in 50 early-stage companies, with the highest allocation of resources to research and development, along with the degree to which firms stress an innovative culture and mission.
MOON seeks investment results, before fees and expenses, which track the S&P Kensho Moonshots Index. The S&P Kensho Moonshots Index measures the performance of 50 U.S.-listed companies with the highest Early-Stage Composite Innovation Score, subject to market capitalization and liquidity criteria. Index constituents are first equal-weighted but are adjusted to account for the liquidity, industry group, and diversification constraints.
The Early-Stage Composite Innovation Score is the combination of the resources a company allocates to innovation and the degree to which the company stresses an innovative culture and mission, as indicated by the Innovation Sentiment Score. The Innovation Sentiment Score reflects the density of innovation-related words and phrases in the company’s latest annual filing.
Looking at the importance of a fund such as this, David B. Mazza, Managing Director, Head of Product for Direxion states, “By construction, MOON excludes the mega-cap tech names, instead focusing on the next generation of innovators (90% of constituents have a market capitalization of less than USD 10 billion). It is also equal-weighted at rebalancing, so it limits concentration risk.”
As far as the timing is concerned, Mazza continues, “With a small group of mega-cap stocks dominating indices today, it is more important than ever to identify companies that are at the forefront of future change.”
MOON offers exposure to 50 of the most innovative companies at the forefront of radical themes changing the way tomorrow’s world works today. The top holdings in The S&P Kensho Moonshots Index represent a mix of mid-cap and small cap companies across various moonshot objectives and progressive themes. Each holding falls into one of 17 thematic subsectors, with autonomous vehicles, clean technology, and genetic engineering being just three examples.
| Ticker | Name | Thematic Sector | Market Cap ($, M) | Weight (%) |
| NIO | NIO Inc | Autonomous Vehicles | 41,655,463,936 | 8.72 |
| WKHS | Workhorse Group Inc | Drones | 1,914,998,528 | 6.48 |
| PLUG | Plug Power Inc | Clean Technology | 5,624,361,984 | 5.35 |
| FATE | Fate Therapeutics Inc | Genetic Engineering | 3,855,874,816 | 2.93 |
| VNE | Veoneer Inc | Autonomous Vehicles | 1,715,214,848 | 2.92 |
| BE | Bloom Energy Corp | Smart Grids | 1,791,850,496 | 2.81 |
| MOBL | MobileIron Inc | Cyber Security | 834,833,600 | 2.78 |
| VRNS | Varonis Systems Inc | Cyber Security | 3,666,678,528 | 2.76 |
| CRWD | Crowdstrike Holdings Inc | Cyber Security | 27,176,534,016 | 2.56 |
| SPCE | Virgin Galactic Holdings Inc | Space | 4,376,842,240 | 2.43 |
Source: S&P Dow Jones Indices, as of 10.31.2020.
For more information, head to www.direxion.com
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