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Strategic Weights ETFs

FLYT

The Direxion Flight to Safety Strategy ETF 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 fund will achieve its stated investment objective.

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Overview

The Direxion Flight to Safety Strategy ETF aims to deliver a simple, yet robust, approach to portfolio risk mitigation from equity market drawdowns while also providing long-term appreciation potential. By combining long-term U.S. treasury bonds, utility stocks, and gold bullion, the ETF may act as a diversified ballast for portfolios while also acting as a source of uncorrelated returns.

  • A strategy that seeks to deliver attractive total return potential with defensive equity characteristics
  • A way to introduce portfolio risk mitigation that does not require precision in timing and ongoing carry costs
  • An ETF with a low correlation to equities and stable volatility can help deliver added diversification to portfolios

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Target Index

The Solactive Flight to Safety Index (the “Index”) measures the performance of a volatility-weighted basket of gold, U.S. listed large-capitalization utility stocks, and U.S. treasury bonds with remaining maturities of greater than 20 years. The Index rebalances on a quarterly basis such that the weight of each component (U.S. treasury bonds, utility stocks, and gold) will be based on the contribution of the volatility of each component to the overall Index. The least volatile component of the Index, based on each component’s trailing 5 year volatility measure, will receive the largest weighting. The gold component will be limited to 22.5% of the Index and its volatility will be based on the volatility of the spot price of gold. One cannot directly invest in an index.

Index Holdings and Weightings

Top 10 Holdings %

Gold Bullion 23.20
Nextera Energy 4.25
Dominion Energy 2.44
Duke Energy 2.11
US Treasury Bond (Nov 2048) 2.08
US Treasury Bond (Feb 2049) 1.99
Southern Co. 1.97
US Treasury Bond (May 2049) 1.95
US Treasury Bond (Aug 2048) 1.87
US Treasury Bond (May 2048) 1.77

Asset Class Weightings %

US 20+ Year Treasury Bonds 48.94
US Large & Mid Cap Utilities 27.86
Gold Bullion 23.20

Source: Bloomberg. Index and Sector weightings are net and as of 6/30/2020 and subject to change.

Index Construction

The Solactive Flight to Safety Index combines long-term U.S. treasury bonds, utility stocks, and gold to provide multi-asset defensive exposures.

  • Asset classes were selected for their defensive characteristics
  • Asset classes were selected for their low-to-negative correlations to each other
  • Risk-weighted approach based on trailing volatility

Fund Exposure

Asset Classes with Lower Volatility are Assigned Greater Weights in the Portfolio


Source: Bloomberg.

Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security.

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Pricing & Performance

NAV and Market Price information as of Invalid date. Line chart shows pricing trend over the last 30 days. The Primary Listing Exchange is the NYSE Arca, Inc.




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