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Rating:Direxion Slows the Tempo for 17 Funds Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, July 07, 2009

Direxion Slows the Tempo for 17 Funds

Reported by Neil Anderson, Managing Editor

Direxion is changing the tracking timeframe for 17 of its mutual funds. In a filing last week, the leveraged index specialists revealed that all of their non-ETF mutual funds (except Direxion U.S. Government Money Market, Dynamic HY Bond and HY Bear), will seek "calendar month leveraged investment results, before fees and expenses" instead of "daily leveraged investment results," starting in August. And the leverage of each of those 17 funds will all shift to 2x (for both magnified and inverse index funds).

A source familiar with the situation confirmed that Direxion's ETFs will continue to target daily leveraged results, at least for now.

That industry insider explained the move as a small change to meet the demands of those investors utilizing the funds.

"Investors don't internalize that daily means daily," the insider told MFWire, noting that most of the investors in Direxion's leveraged, non-ETF mutual funds aim for "medium-term holding periods" of less than a month. "A monthly reset period may be more interesting to them."

"It's a change, but in the broad spectrum of things it's not a major change," the insider added. "They're still not not buy and hold types of investments. They're still tactical investment tools."

The move affects the following funds (which have been renamed as well):

  • Direxion Monthly S&P 500 Bull 2x;
  • Direxion Monthly S&P 500 Bear 2x;
  • Direxion Monthly NASDAQ-100 Bull 2x;
  • Direxion Monthly NASDAQ-100 Bear 2x;
  • Direxion Monthly Small Cap Bull 2x;
  • Direxion Monthly Small Cap Bear 2x;
  • Direxion Monthly Dollar Bull 2x;
  • Direxion Monthly Dollar Bear 2x;
  • Direxion Monthly Emerging Markets Bull 2x;
  • Direxion Monthly Emerging Markets Bear 2x;
  • Direxion Monthly Developed Markets Bull 2x;
  • Direxion Monthly Developed Markets Bear 2x;
  • Direxion Monthly Latin America Bull 2x;
  • Direxion Monthly China Bull 2x;
  • Direxion Monthly Commodity Bull 2x;
  • Direxion Monthly 10 Year Note Bull 2x;
  • and Direxion Monthly 10 Year Note Bear 2x

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