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Rating:Two Firms Lever Their ETF Position Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, March 15, 2010

Two Firms Lever Their ETF Position

Reported by Stephanie Bernhard

Leveraged ETFs are springing up quicker than crocuses this month, with fund firms Direxion and ProShares at the head of the pack.

On March 11, Direxion launched six new leveraged ETFs with a focus on emerging markets, including the Daily India Bull 2x Shares, the Daily Semiconductor Bull 3x Shares, the Daily Semiconductor Bear 3x Shares, the Daily India Bear 2x Shares, Daily BRIC Bull 2x Shares, and the Daily BRIC Bear 2x Shares. The latter two funds represent the first levered ETFs offering exposure to the BRIC (Brazil, Russia, India, and China) economies. These four economies are the largest in the world to be defined as "emerging."

All of the funds carry an expense of 95 basis points, according to a filing. Newton, Massachusetts-based Rafferty Asset Management serves as investment manager for the Direxion funds. Foreside Fund Services is the funds' distributor. Bank of New York Mellon serves as the funds' transfer agent, administrator, custodian and index receipt agent.

Including these six new funds, Direxion has launched 10 new leveraged ETFs in the past four months, bringing Direxion's product lineup up to 34 funds (MFWire reported on the original launches in December). Almost all of the new ETFs emphasize emerging markets.

Meanwhile, ProShares refuses to be left in the dust in the leveraged ETF race. The largest issuer of leveraged and inverse ETFs, ProShares has filed for SEC approval on several news funds. These include the Short FTSE/Xinhua China 25, also focused on an emerging market, as well as the Ultra Nasdaq Biotechnology, the UltraShort Nasdaq Biotechnology, the Short Basic Materials, and the Short Real Estate. The fund prospectus is dated tomorrow, March 16, 2010, and indicates that ProShare Advisors LLC will serve as investment advisor for the funds, and SEI Investments Distribution will come on board as Distributor.

 

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