On Wednesday, Direxion unveiled its latest strategic pair of leveraged and inverse ETFs. The new funds, the Direxion Daily Crypto Industry Bull 2X Shares (LMBO) and the Direxion Daily Crypto Industry Bear 1X Shares (REKT), focus on the crypto industry.
“Crypto equities are among the fastest-growing companies in the world, now representing an almost $3 trillion asset class,” said Edward Egilinsky, Direxion’s managing director. “LMBO and REKT provide focused exposure for traders to express their short-term conviction on companies building the future of a crypto-driven, decentralized economy.”
Whethert bullish or bearish, both ETFs measure their performance based on the performance of the Solactive Distributed Ledger & Decentralized Payment Tech Index. This index primarily invests in securities listed in the U.S. that operate in the fields of distributed ledgers or decentralized payment technologies. This includes blockchain technology, decentralized finance, and digital asset mining hardware, among others.
Bullish on Blockchain
LMBO may be a suitable fund for investors who have faith in future of the blockchain and decentralized finance. The fund has a net expense ratio of 1.07%. It aims to provide leveraged exposure to the Solactive index’s daily performance.
An Inverse View
Meanwhile, REKT provides a more bearish view. The fund’s strategy focuses on providing daily inverse investment results to the performance of the Solactive index. REKT has a net expense ratio of 0.57%.
Both funds will attempt to achieve their investment goals regardless of how the index or overall market is doing. LMBO and REKT intend to be fully invested at all times. However, though the funds may invest in securities outside the index.
“Crypto ETF flows came roaring out of the gate this year. And while they may have simmered down last quarter, sentiment remains strong. These products offer ways to double down and make tactical bets on or against the crypto business. They are timely but often risky and not well-suited for a buy-and-hold audience,” noted Kirsten Chang, senior industry analyst at VettaFi.
REKT and LMBO are intended to be used by investors knowledgeable about the risks of such strategies. However, Direxion is an experienced handler of leveraged and inverse ETF strategies,. The issuer has over $46 billion in assets under management.
For more news, information, and analysis, visit the Leveraged & Inverse Channel.
