Direxion [profile] continues to expand its alt fund lineup, this time with a product that long/shorts global currency.

The new product is reportedly based on the methodology of the Morgan Stanley Multi FX Enhanced V10 USD Index. The fund can take a long or short position in 19 eligible currencies in both developed and emerging markets. Its strategy places equal emphasis on four factors — interest rates, inflation, open interest and stock index performance — when determining whether to invest long or short on an individual currency. The strategy is designed to target a volatility level of 10 percent, and rebalances portfolio allocations on a monthly basis, at a minimum.

Here is the press release:

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Company Press Release

Firm Expands Suite of Liquid Alternative Mutual Funds With Rules-Based Approach to Investing in Foreign Currencies

  Direxion, a leader in alternative investment solutions, has expanded its suite of alternative-strategy mutual funds with the introduction of the Direxion Long/Short Global Currency Fund (DXAFX). The Fund offers investors a cost-efficient, liquid and transparent way to obtain direct exposure to currencies in a broad range of markets around the world.  Direxion’s currency fund is the latest addition to a lineup that offers institutional-style alternative strategies to the retail marketplace. 

  The actively-managed fund utilizes a rules-based, long/short investment approach developed by Direxion based on the methodology of the Morgan Stanley Multi FX Enhanced V10 USD Index. The Fund can take a long or short position in 19 eligible currencies in both developed and emerging markets. Its strategy places equal emphasis on four factors — interest rates, inflation, open interest and stock index performance — when determining whether to invest long or short on an individual currency. The strategy is designed to target a volatility level of 10 percent, and rebalances portfolio allocations on a monthly basis, at a minimum.

  “Our Fund offers investors the opportunity to directly invest in foreign currencies and potentially benefit whether the U.S. dollar increases or decreases in value relative to those currencies,” said Edward Egilinsky, Managing Director and Head of Alternative Investments at Direxion. “The Fund sets itself apart in the marketplace by offering retail investors both the broad diversification of 19 global currencies — in developed and emerging markets — combined with a long/short approach.”

“Currencies have historically displayed low correlations and independent return streams to other alternative asset classes and strategies, such as managed futures and hedge funds,” said Mr. Egilinsky. “The ability of a long/short currency strategy to perform in varied market conditions provides investors the potential for additional diversification within a stock and bond portfolio.”

   

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