5 Long/Short ETF Pairs Debut

January 17, 2019

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.

 

Ticker Fund Index Exp Ratio
RWVG Direxion Russell 1000 Value Over Growth ETF Russell 1000 Value/Growth 150/50 Net Spread Index 0.46%
RWGV Direxion Russell 1000 Growth Over Value ETF Russell 1000 Growth/Value 150/50 Net Spread Index 0.46%
RWLS Direxion Russell Large Over Small Cap ETF Russell 1000/Russell 2000 150/50 Net Spread Index 0.46%
RWSL Direxion Russell Small Over Large Cap ETF Russell 2000/Russell 1000 150/50 Net Spread Index 0.47%
RWCD Direxion MSCI Cyclicals Over Defensives ETF MSCI USA Cyclical Sectors – USA Defensive Sectors 150/50 Return Spread Index 0.45%
RWDC Direxion MSCI Defensives Over Cyclicals ETF MSCI USA Defensive Sectors – USA Cyclical Sectors 150/50 Return Spread Index 0.45%
RWED Direxion MSCI Emerging Over Developed Markets ETF MSCI Emerging Markets IMI – EAFE IMI 150/50 Return Spread Index 0.58%
RWDE Direxion MSCI Developed Over Emerging Markets ETF MSCI EAFE IMI – Emerging Markets IMI 150/50 Return Spread Index 0.52%
RWUI Direxion FTSE Russell US Over International ETF Russell 1000/FTSE All-World ex US 150/50 Net Spread Index 0.46%
RWIU Direxion FTSE Russell International Over US ETF FTSE All-World ex US/Russell 1000 150/50 Net Spread Index 0.55%

 

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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