Direxion Adds Mid Cap ETFs
January 9, 2009

SAN DIEGO (ETFguide.com) - Direxion Shares has just added two more leveraged exchange-traded funds (ETFs) to its fold.

The Mid Cap Bull 3X Shares (NYSEArca: MWJ) attempts to deliver 300% the daily price performance of the Russell MidCap Index and the Mid Cap Bear 3X Shares (NYSEArca: MWN) attempts to deliver 300% the daily inverse price performance of the same mid cap index.

Funds that attempt to deliver inverse or opposite market performance are also known as short ETFs.

Mid cap stocks generally have market capitalizations that fall between $2 billion to $10 billion.

In 2008, mid cap stocks were hit hard along with the rest of the market. The iShares Russell Mid Cap ETF (NYSEArca: IWR), which follows the same index, declined by 42.3%. Other mid cap ETFs like the Mid Cap SPDR (AMEX: MDY) delivered similar performance. MDY follows the S&P Mid Cap 400.

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Top holdings inside the Russell Mid Cap Index include Marsh & McLennan, HJ Heinz, and Yum! Brands. Financials (19.06%), industrials (16.64%), and consumer services (13.37%) represent the three largest industry sectors with the index.

The Mid Cap Bull 3X Shares, under normal circumstances, creates long positions by investing at least 80% of its net assets in the equity securities that comprise the Russell Mid Cap Index. The fund also has the discretion to invest in swaps, options or futures that can provide leveraged and unleveraged exposure to the Mid Cap Index.

The Mid Cap Bear 3X Shares does not invest in equity securities. It creates short positions by investing at least 80% of its net assets in various financial instruments that can provide leveraged and unleveraged exposure to the Russel Mid Cap Index. Remaining assets are invested money market instruments, which the fund also holds.

ProShares Advisors and Rydex Investments also offer leveraged and short ETFs. The leveraged funds offered by these providers attempt to double daily performance.

According to the prospectus, the new Direxion ETFs carry annual expense ratios of 0.95%.

Including the new mid cap offerings, Boston, MA-based Direxion Shares currently manages 16 ETFs with just over $1 billion in assets.

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