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Monday, July 20, 2009

Direxion's Latest Bear/Bull Pair Lands

Reported by Meredith Mazzilli

Direxion launched the latest in its leveraged, directional lineup on Thursday. The Newton, Massachusetts-based fund firm now offers Daily Real Estate Bull 3x (DRN) and Daily Real Estate Bear 3x (DRV) funds, both of which have an expense ratio of 95 bps. The funds will offer triple the daily performance or inverse daily performance of the MSCI US REIT Index, which represents roughly 85% of the US REIT universe.

The launch coincided with increased noise surrounding highly leveraged ETFs as Direxion, along with Rydex and ProShares, fell under Massachusetts's Secretary of State William Galvin's scrutiny last week. Galvin, citing concerns regarding the explosion of leveraged ETFs, initiated what he called an "inquiry" into such funds (see the MFWire, 6/16/2009) .

While the two new ETFs will offer exposure to daily performance of their underyling index, Direxion has changed the time frame for leveraged exposure for its lineup of leveraged, conventional mutual funds. Earlier this month, the fund firm filed changed with the SEC that revised most of its non-ETF mutual funds to now track the calendar month leveraged investment results instead of daily results (see the MFWire, 06/7/2009 ). Direxion apparently has no current plans to make similar changes to its ETF lineup.

The Direxion funds are not the first leveraged offerings in the real estate exchange-traded space. The ProShares Real Estate UltraSector and UltraShort Sector funds track double and double inverse performance of the Dow Jones U.S. Real Estate Index. MacroShares currently offers a pair of exchange-traded securities that offer "up" and "down" exposure by tracking three times the cumulative and cumulative inverse change of the S&P/Case-Shiller Composite-10 Home Price Index.


Direxion Shares Adds Two Real Estate 3x Leveraged ETFs to Existing Fund Offerings

New Funds Offer Daily Leveraged Long and Short Exposure to REIT Indexes

Newton, MA – July 16, 2009 - Direxion, a pioneer in providing alternative investment strategies to sophisticated investors, is pleased to announce the addition of two new Direxion Daily Shares 3x ETFs to their existing lineup of 20 multi-directional, leveraged funds. The new ETFs are leveraged Bull and Bear index funds that seek 300% of the daily performance, or 300% of the inverse of the daily performance (before fees and expenses), of the MSCI U.S. REIT Index. There is no guarantee that the funds will achieve their objective.

The two new Direxion ETFs are:

Direxion Daily Real Estate Bull 3x Shares DRN 25459W 755 MSCI U.S. REIT IndexSM 300% Bear Funds

Direxion Daily Real Estate Bear 3x Shares DRV 25459W 748 MSCI U.S. REIT IndexSM -300%

“As we continue to expand our ETF line up, we are excited to provide innovative new products for investors seeking increased exposure to the real estate investment trust market,” stated Dan O’Neill, Direxion Shares’ President. “These two new ETFs further enhance our unique offering of solutions for the tactically minded investor.”

Many sophisticated advisors and institutional investors are using Direxion 3x ETFs to magnify their daily market perspective, while others are using the Funds to implement short-term hedge positions in their portfolios. The 22 Direxion Shares ETFs represent the highest amount of leverage currently available in the ETF space.

The MSCI U.S. REIT Index represents approximately 85% of the U.S. REIT universe. “The flexibility that our ETFs provide, on both the long and short side, can be especially valuable for sophisticated investors who use tactical strategies in order to navigate today’s volatile market,” continued O’Neill. “We look forward to pioneering more powerful tools that enable investors to actively manage their portfolios, as we continue growing our line up of multi-directional and leveraged products.”

By providing both a Bull and a Bear fund to track each of the indexes, Direxion gives seasoned investors the ability to seek competitive returns in rising and falling markets across a wide spectrum of diversified assets. The ETF structure allows investors to benefit from the intra-day trading flexibility, coupled with the leveraged investment solution that Direxion is known for in the mutual fund industry. To request more information on Direxion Shares 3x ETFs, or to speak to a member of the Direxion team, please call 866-476-7523 or email info@direxionshares.com. Public relations contact: JC Public Relations, 973-732-3521, Carol Graumann, carol@jcpublicrelations.com, or Katrine Winther-Olesen, Katrine@jcpublicrelations.com. 

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