Funds That Allow New Expression of Thematic Views Mark Evolution for Firm
NEW YORK—January 16, 2019—Direxion announced today it has launched the first 10 ETFs of its new Relative Weight suite, part of a firm evolution offering new products to help a wider swath of investors more precisely express market views.
For more information on the funds, visit: direxioninvestments.com/RelativeWeightETFs.
With the launch, Direxion offers the first relative value strategy in an index-based fund, allowing investors to capture both sides of an expressed view—whether they believe, for example, value will outperform growth, emerging will outperform developed markets, or vice versa.
The ETFs seek to track indexes from FTSE Russell and MSCI that capture common macro thematic views, without the typical constraints encountered with other funds. Investors who deploy some level of thematic views in their investment process can now use shorting to enhance their long exposure.
“You can overweight growth if you believe it’s going to outperform the market. But, for some investors, that only captures half of their view. If growth beats the market, then it obviously beats value by even more,” said Dave Mazza, Managing Director and Head of Product of Direxion.
“The beauty of these funds is they allow you to extend your viewpoint to the short side to seek additional returns. Your view is no longer mismatched with the fund—the fund is now designed to match your view.”
Each fund allows investors to 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.
Direxion’s 10 ETFs cover five well-known investment pairs, and are built using familiar passive building blocks:
|RWIU||Direxion FTSE Russell International Over US ETF||FTSE All-World ex US/Russell 1000 150/50 Net Spread Index (AWXUR1NC)|
|RWUI||Direxion FTSE Russell US Over International ETF||Russell 1000/FTSE All-World ex US 150/50 Net Spread Index (R1AWXUNC)|
|RWCD||Direxion MSCI Cyclicals Over Defensives ETF||MSCI USA Cyclical Sectors – USA Defensive Sectors 150/50 Return Spread Index (DU722431)|
|RWDC||Direxion MSCI Defensives Over Cyclicals ETF||MSCI USA Defensive Sectors – USA Cyclical Sectors 150/50 Return Spread Index (DU722430)|
|RWDE||Direxion MSCI Developed Over Emerging Markets ETF||MSCI EAFE IMI – Emerging Markets IMI 150/50 Return Spread Index (DU722424)|
|RWED||Direxion MSCI Emerging Over Developed Markets ETF||MSCI Emerging Markets IMI – EAFE IMI 150/50 Return Spread Index (DU722425)|
|RWGV||Direxion Russell 1000® Growth Over Value ETF||Russell 1000® Growth/Value 150/50 Net Spread Index (R1GR1VNC)|
|RWVG||Direxion Russell 1000® Value Over Growth ETF||Russell 1000® Value/Growth 150/50 Net Spread Index (R1VR1GNC)|
|RWLS||Direxion Russell Large Over Small Cap ETF||Russell 1000®/Russell 2000® 150/50 Net Spread Index (R1R2NC)|
|RWSL||Direxion Russell Small Over Large Cap ETF||Russell 2000®/Russell 1000® 150/50 Net Spread Index (R2R1NC)|
The index 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.
While most known for tactical trading funds, Direxion has in recent years deliberately expanded offerings to more thematic investors and strategic allocators—notably with its PortfolioPlus Suite launch 11 months ago.
“Today’s launch marks a clear inflection point for the firm,” said Rob Nestor, President and Head of Direxion. “The Relative Weight ETF suite represents a logical expansion of our core expertise by providing precise and highly directed exposures. Our focus is now much broader than just highly-tactical trading.”
“Currently, most investors are only able to overweight or underweight to the long-side. Now they can access returns from the short side and fully capture their expressed view. What’s more, they can do so with one simple product, without net leveraged exposure. It is our way of building on our DNA,” Nestor added.
Direxion’s mission is to democratize institutional strategies for their clients, including tactical traders, thematic investors and strategic asset allocators.Press Release (pdf)
Direxion equips investors who are driven by conviction with ETF solutions built for purpose and fine-tuned for precision. These solutions are available for a broad spectrum of investors, whether executing short-term tactical trades, investing in macro themes, or building long-term asset allocation strategies. Direxion’s reputation is founded on developing products that precisely express market perspectives and allow investors to manage their risk exposure. Founded in 1997, the company has approximately $11.5 billion in assets under management as of
December 31, 2018. For more information, please visit www.direxion.com.
There is no guarantee that the Funds will achieve their investment objectives.
For more information on all Direxion Shares daily leveraged ETFs, go to direxioninvestments.com, or call us at 866.476.7523.
An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 646-798-9337 or visit our website at direxioninvestments.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.
Direxion Relative Weight ETFs Risks – Investing involves risk including possible loss of principal. The ETFs’ investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in or shorting securities or other investments. There is no guarantee that the returns on an ETF’s long or short positions will produce high, or even positive returns and the ETF could lose money if either or both of the ETF’s long and short positions produce negative returns. Please see the summary and full prospectuses for a more complete description of these and other risks of the ETFs.
Distributor: Foreside Fund Services, LLC.