5 Long/Short ETF Pairs Debut

Direxion launches a family of ‘Relative Weight’ funds.

ETF.com
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Direxion has rolled out a family of long/short ETFs that allow investors to express their opinions on key opposing macro trends. The funds, their tickers, underlying indexes and expense ratios are included in the below table. The 10 products are listed on the NYSE Arca.

 

TickerFundIndexExp Ratio
RWVGDirexion Russell 1000 Value Over Growth ETFRussell 1000 Value/Growth 150/50 Net Spread Index0.46%
RWGVDirexion Russell 1000 Growth Over Value ETFRussell 1000 Growth/Value 150/50 Net Spread Index0.46%
RWLSDirexion Russell Large Over Small Cap ETFRussell 1000/Russell 2000 150/50 Net Spread Index0.46%
RWSLDirexion Russell Small Over Large Cap ETFRussell 2000/Russell 1000 150/50 Net Spread Index0.47%
RWCDDirexion MSCI Cyclicals Over Defensives ETFMSCI USA Cyclical Sectors – USA Defensive Sectors 150/50 Return Spread Index0.45%
RWDCDirexion MSCI Defensives Over Cyclicals ETFMSCI USA Defensive Sectors – USA Cyclical Sectors 150/50 Return Spread Index0.45%
RWEDDirexion MSCI Emerging Over Developed Markets ETFMSCI Emerging Markets IMI – EAFE IMI 150/50 Return Spread Index0.58%
RWDEDirexion MSCI Developed Over Emerging Markets ETFMSCI EAFE IMI – Emerging Markets IMI 150/50 Return Spread Index0.52%
RWUIDirexion FTSE Russell US Over International ETFRussell 1000/FTSE All-World ex US 150/50 Net Spread Index0.46%
RWIUDirexion FTSE Russell International Over US ETFFTSE All-World ex US/Russell 1000 150/50 Net Spread Index0.55%

 

The funds offer 150% long exposure to one macro trend and 50% short exposure to the opposing trend, with each fund having a counterpart that offers the exact opposite exposure.

Thus, the Direxion Russell 1000 Value Over Growth ETF (RWVG) provides 150% long exposure to a value index and 50% short exposure to a growth index, while RWGV provides 150% long exposure to the aforementioned growth index and 50% short exposure to the value index. The four other ETF pairs operate in a similar way.

"[Previously,] most investors are only able to overweight or underweight to the long side,” said Direxion President Rob Nestor. “Now they can access returns from the short side and fully capture their expressed view. What's more, they can do so with one simple product, without net leveraged exposure. It’s our way of building on our DNA.”

Greater Returns

If investors are correct in their expectations when they select one of these funds, with the long-exposure trend increasing and the short-exposure trend declining, they will see greater returns than if they had simply made a long investment in the outperforming trend. According to a press release from Direxion, the risk profile for the strategies is similar to that of the underlying asset class.

"The beauty of these funds is they allow you to extend your viewpoint to the short side to seek additional returns,” said Direxion’s Head of Product David Mazza. “Your view is no longer mismatched with the fund—the fund is now designed to match your view.”

The funds are the first of their kind, but Direxion has a wide-ranging offering of funds providing leverage and inverse exposure to various asset classes.

Contact Heather Bell at [email protected]

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