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Rating:A 27-Year Old AM Offers a Bet On EMs, Sans China Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, February 13, 2024

A 27-Year Old AM Offers a Bet On EMs, Sans China

Reported by Neil Anderson, Managing Editor

The team at a 27-year-old, $38.1-billion-AUM (as of December 31) fund firm are rolling out a new offering to help active traders bet on emerging markets outside of China.

Last week, Edward Egilinsky, managing director and head of sales and alternatives at Direxion [profile], unveiled the launch of the Direxion Daily MSCI Emerging Markets ex-China Bull 2X Shares ETF (XXCH on the NYSE Arca). The new ETF is a series of the Direxion Shares ETF Trust.

XXCH's inception date was February 7. The new fund comes with an expense ratio of 118 basis points, which bakes in a two-bps fee waiver that is promised through September 1, 2025.

Rafferty Asset Management, LLC (home of the Direxion funds and ETFs) is XXCH's investment advisor, and MSCI Inc. serves as index provider. The new ETF's PM team includes two portfolio managers, Paul Brigandi and Tony Ng.

The new ETF is designed to double the daily performance of the MSCI Emerging Markets ex China Index, which tracks mid-cap and large-cap stocks across 23 emerging markets while excluding China. (The Rafferty team already offers four ETFs that allow traders to make bets specifically on China, plus two ETFs for betting on emerging markets overall.)

Egilinsky puts the launch of XXCH in the context of the contrast between China's 2023 equity market woes and the 2023 equity market gains of other emerging markets (including India, South Korea, and Taiwan).

"Amidst the geopolitical swirl surrounding China, some traders are looking to separate the country's stocks, while maintaining broader exposure to the emerging market countries," Egilinsky states. "XXCH allows precise short-term exposure, providing a tactical opportunity for traders to independently manage their exposure to China's unique risks."

XXCH's other service providers include: Bank of New York Mellon as custodian, fund accountant, index receipt agent, securities lending agent, and transfer agent; Ernst & Young LLP as independent accounting firm; ACA's Foreside Fund Services, LLC as distributor; K&L Gates LLP as counsel; and U.S. Bancorp Fund Services, LLC (USBFS) as administrator. 

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