Direxion launches three new 'buy and hold' ETFs
Direxion has expanded its range of buy and hold products with the launch of the three new ETFs: the Direxion Dynamic Hedge ETF (DYHG, Net Expense Ratio: 0.57 per cent), the Direxion High Growth ETF (HIPR, Expense Ratio: 0.40 per cent), and the Direxion Fallen Knives ETF (NIFE, Expense Ratio: 0.50 per cent).
"Recent market events have reminded investors about the need for diversification and created opportunities to introduce unique exposures in portfolios," says Dave Mazza, Managing Director at Direxion. "We're excited to introduce these strategies to help investors build more robust portfolios in a challenging market environment."
The last few months have once again highlighted the foundational challenge for most risk averse investors – how to cost-effectively limit downside impact, while still participating in the upside of the markets over time. DYHG, which seeks investment results that track the Salt truVolTM US Large Cap Dynamic Hedge Index, is a potential core equity holding offering a systematic hedging methodology that seeks to responsively mitigate market risk.
"Salt Financial is excited to partner with Direxion in bringing the Direxion Dynamic Hedge ETF to market to help investors better manage portfolio risk," says Tony Barchetto, CFA, Founder and Chief Investment Officer of Salt Financial. The strategy leverages truVol, Salt's proprietary analytic tool that uses intraday price data to aim for more accurate and responsive estimates of future volatility, as compared to traditional measures using only end-of-day prices.
HIPR seeks to track the investment results of the Russell 1000 Hyper Growth Index, a rules-based methodology that targets stocks with an attractive combination of traditional growth stock measures – such as revenue, earnings, and cash flow growth – as well as appealing quality and price momentum measures. This combination results in a portfolio of large and mid-cap domestic companies with the potential for both high and sustained growth over time, rather than targeting traditional growth stock measures alone.
Finally, NIFE seeks to track investment results of the Indxx US Fallen Knives Index, which identifies companies that have experienced significant price deterioration, making them possibly poised for a price revival. Investing in stocks that may be subject to some short-term controversy – fallen knives – is a commonly deployed strategy. It, however, requires a disciplined, rules-based approach in order to separate those with likely temporary (rather than secular) business and price declines. Screening for eligible names that have both recently experienced substantial price decline, but maintained strong measures of financial health, increases the likelihood of a price rebound and offers the opportunity for a highly differentiated exposure.
"As noted earlier this year, Direxion remains committed to introducing new products that offer exposure to longer-term investment themes, while remaining a leading Leveraged and Inverse ETF provider for traders," says Rob Nestor, President at Direxion.