Direxion Accelerates Expansion of ETF Strategies for Long-term Investors
Three New ETFs Are First of Many Buy-and-Hold Strategies Slated for 2020
NEW YORK — February 5, 2020—Direxion announced today it has launched the first three of several planned ETF launches for 2020. The new ETFs are part of an acceleration of fund offerings to help long-term buy-and-hold investors benefit from strategically-focused return streams.
The three new funds include the Direxion MSCI USA ESG - Leaders vs. Laggards ETF (Ticker: ESNG), the Direxion Flight to Safety Strategy ETF (Ticker: FLYT), and the Direxion S&P 500® High Minus Low Quality ETF (Ticker: QMJ).
ESNG aims to offer more pronounced exposure to environmental, social & corporate governance leaders, while simultaneously having a short position in those that significantly lag behind, as defined by MSCI’s market leading ESG metrics. The ETF tracks an index which measures both the ESG rating, as well as the rating trend, of companies relative to their sector peers. Utilizing a 150/50 structure, the index methodology creates an extended exposure (equal to 150% of net assets at rebalance) to the 100 highest scoring ESG companies, while having a short position (50% of assets) to the 100 lowest scoring companies, in the MSCI USA universe, with a net long exposure of 100% (that is, no net leverage). It is the first ESG ETF of its kind offering such an exposure.
Similarly, QMJ utilizes a simple, capital-efficient 150/50 structure to seek to deliver increased exposure to the quality factor. The index and fund will target 150% exposure to the stocks with the highest scoring measures of quality (including return on equity, financial leverage ratio, and accruals ratio), while maintaining a negative 50% exposure to low quality stocks as defined by S&P from the universe of 500® stocks. It is also the first smart beta ETF of its kind to offer such an exposure to the quality factor*, which continues to gain investor attention relative to more well-known factors, such as value or low volatility.
FLYT combines long-term U.S. Treasurys, utility stocks, and physical gold into a single portfolio. FLYT is designed to deliver a source of returns uncorrelated to the equity markets, with the ability to provide meaningful appreciation and yield potential over the long term. This allows investors to not only mitigate potential market risk, but participate in a low cost way that many liquid alternative strategies have struggled to deliver. The Fund seeks to reduce portfolio risk by being a highly responsive investment in the event of market volatility and equity declines.
“We’re on a mission to accelerate the number and variety of strategies we offer that can benefit long-term investors,” said Dave Mazza, Managing Director at Direxion. “These strategies allow a broader audience to benefit from our expertise in delivering smart, precise exposure to distinct and strategically focused investment opportunities.”
Although Direxion continues as the leader in 3X Leveraged ETFs for traders, the ETFs planned for rollout in subsequent 2020 quarters will focus on Direxion’s commitment to extending the firm’s expertise in allowing more surgical exposure to longer-term investment themes.
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 $14 billion in assets under management as of December 30, 2019. For more information, please visit www.direxion.com.
* Quality metrics, in regards to QMJ, are focused on return on equity, accruals, and financial leverage.
The Direxion Flight to Safety Strategy ETF’s investment objective seeks to provide total returns that exceed the total return of the Solactive Flight to Safety Index over a complete market cycle.
There is no guarantee that the Funds will achieve their investment objectives.
For more information on all Direxion Shares daily leveraged ETFs, go to direxion.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 866-716-0735 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.
ESNG Risks - Investing involves risk including possible loss of principal. The Fund’s investment in derivatives may pose risks in addition to, and greater than, those associated with directly investing in or shorting securities or other investments. The Fund’s incorporation of ESG considerations in its investment process means that because the methodology of the Index selects and assigns weights to securities of issuers for nonfinancial reasons, the Fund may underperform or forgo higher yielding investments in relation to the broader equity market or other funds that do not utilize ESG criteria when selecting investments. There is no guarantee that the returns on the Fund’s long or short positions will produce positive returns, and the Fund could lose money on either or both of the Fund’s long and short positions. Please see the summary and full prospectuses for a more complete description of these and other risks of the Fund.
QMJ Risks - Investing involves risk including possible loss of principal. The Fund’s investment 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 investment strategy will be successful in identifying high and low quality stocks. Many factors can affect a stock’s quality and performance, and the impact of these factors on a stock or its price can be difficult to predict. Quality stocks may underperform while non-quality stocks may perform well. There is no guarantee that the returns on the Fund’s long or short positions will produce positive returns, and the Fund could lose money on either or both Fund’s long and short positions. Please see the summary and full prospectuses for a more complete description of these and other risks of the Fund.
FLYT Risks - FLYT is an actively managed ETF that does not seek to replicate the performance of a specified index and is not required to invest in the specific components of its benchmark index. An investment in the Fund involves risk, including the possible loss of principal. There are risks associated with the Fund’s investment in gold, U.S treasury bonds, and utility stocks. The value of gold has historically experienced extended periods of flat or declining prices in addition to sharp fluctuations, which may result in significant volatility and potential losses to the Fund. A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Utility companies are affected by supply and demand, operating costs, government regulation, environmental factors, liabilities for environmental damage and general liabilities, and rate caps or rate changes. Additional risks of the Fund include, but are not limited to Commodity-Linked Derivatives Risk, Counterparty Risk, Cash Transaction Risk, Other Investment Companies (including ETFs) Risk, Subsidiary Investment Risk, Interest Rate Risk, and Tax Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of the Fund.
Distributor: Foreside Fund Services, LLC.