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Triple Leveraged Long - Short ETFs Now Available
November 8, 2008
SAN DIEGO (ETFguide.com) – Direxion Shares has just introduced eight new exchange-traded funds (ETFs) on the NYSE Arca stock exchange.
All of the funds attempt to magnify the performance of their underlying indexes by 300 percent on the upside or 300 percent on the downside. Direxion’s ETFs use a combination of derivatives, futures, and swaps to obtain their leverage.
How To Profit In Tough Markets >> Learn More
According to the prospectus, the funds will charge annual expenses of 0.95 percent.
The Large Cap Bull 3x ETF (NYSEArca: BGU) and the Large Cap Bear 3x ETF (NYSEArca: BGZ) both use the Russell 1000 large cap index as a benchmark.
BGU provides investors or traders that are bullish on the prospects of large company stocks with 300 percent upside exposure to the daily performance of the Russell 1000. BGZ attempts to deliver inverse daily performance of the Russell 2000 small cap index by 300 percent.
The Small Cap Bull 3x ETF (NYSEArca: TNA) and the Small Cap Bear 3x ETF (NYSEArca: TZA) both use the Russell 2000 small cap index as a benchmark.
TZA provides investors or traders that are bearish on the prospects of small company stocks with 300 percent downside exposure to the daily performance of the Russell 2000. TNA attempts to deliver leveraged daily performance of the Russell 2000 small cap index by 300 percent.
How To Profit In Tough Markets >> Learn More
In addition Direxion launched a suite of 3x leveraged ETFs connected to the energy and financial sector.
The timing of the Direxion’s launch is contrarian to say the least. The entire financial sector is in the midst of massive de-leveraging, which is the opposite of Direxion’s ETF strategies that attempt to triple daily performance.
List of new short and long triple leveraged ETFs:
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Name
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Ticker
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Direxion Large Cap Bull 3x Shares
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BGU
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Direxion Large Cap Bear 3x Shares
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BGZ
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Direxion Small Cap Bull 3x Shares
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TNA
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Direxion Small Cap Bear 3x Shares
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TZA
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Direxion Energy Bull 3x Shares
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ERX
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Direxion Energy Bear 3x Shares
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ERY
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Direxion Financial Bull 3x Shares
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FAS
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Direxion Financial Bear 3x Shares
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FAZ
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ProShares Advisors and Rydex Investments also offer leveraged and inverse performing ETFs. ProShares just added another eight new leveraged short ETFs to their existing line-up (read related article "Is The Bull Market In Short ETFs Over?").
Direxion manages around $1.5 billion in mutual funds using similar leveraged and inverse performing strategies. The company is planning to launch ETFs that target specific industry sectors.
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