Increased volatility and macro uncertainty, which has affected a large range of asset classes, has investors looking for new solutions for an aging bull market. Can macro-themed ETFs provide a way for investors to take advantage of relative-value strategies in the intermediate term?
On the upcoming webcast, ETF Strategies for a Late-Cycle Bull Market, David Mazza, Managing Director, Head of Product, Direxion; and Inkoo Kang, V.P. Product and Institutional Strategy, Direxion, will discuss the maturing bull market environment and look to sectors and asset classes that are driving returns, along with smart ways to efficiently weight a portfolio toward the assets classes one believes will show the strongest intermediate-term potential.
To help investors better access the markets, Direxion has come out with a suite of ETFs to cover well-known investment pairs, and they are built using familiar passive building blocks, including:
- Direxion Russell 1000 Value Over Growth ETF (RWVG)
- Direxion Russell 1000 Growth Over Value ETF (RWGV)
- Direxion Russell Large Over Small Cap ETF (RWLS)
- Direxion Russell Small Over Large Cap ETF (RWSL)
- Direxion MSCI Cyclicals Over Defensives ETF (RWCD)
- Direxion MSCI Defensives Over Cyclicals ETF (RWDC)
- Direxion MSCI Emerging Over Developed Markets ETF (RWED)
- Direxion MSCI Developed Over Emerging Markets ETF (RWDE)
- Direxion FTSE Russell US Over International ETF (RWUI)
- Direxion FTSE Russell International Over US ETF (RWIU)
The underlying indices for each Relative Weight ETF is built with a 150% long component and 50% short component, resulting in a net exposure of 100% of assets. Each ETF and its benchmark index has an oppositely-weighted counterpart. The ETFs provide relative outperformance if the long component outperforms the short component. The strategy implements the long side of the trade, and then also rewards an investor when a macro view is correct.
Each ETF helps investors capture both sides of their expressed view, with a risk profile similar to the broad underlying asset class. The products are built on Direxion’s core expertise of delivering sophisticated and precise exposure, whether views are short, intermediate or long term.
With these ETFs, Direxion is the first to offer this long-short relative value strategy in an index-based fund. Whether they believe, for example, value will outperform growth, emerging will outperform developed markets, or vice versa–all is captured within the convenience of one ETF as opposed to holding two separate positions.
Financial advisors who are interested in learning more about strategies for the late cycle can register for the Tuesday, June 18 webcast here.