Direxion Debuts ETF Family

Direxion expanded and revamped a portion of its lineup of leveraged funds yesterday. The Portfolio+ family rebrands two of the firm’s existing products and adds another four to the same family of funds offering 1.25X exposure to their underlying indexes. Interestingly, the Portfolio+ family has its own website and does not carry the Direxion brand.

The new funds all list on the NYSE Arca. Their names, tickers, expense ratios and underlying indexes are as follows:

• Portfolio+ S&P Mid Cap ETF (PPMC), 0.40%, S&P Mid Cap 400 Index
• Portfolio+ Developed Markets ETF (PPDM), 0.47%, FTSE Developed All Cap ex US Index
• Portfolio+ Emerging Markets ETF (PPEM), 0.40%, FTSE Emerging Index
• Portfolio+ Total Bond Market ETF (PPTB), 0.34%, Bloomberg Barclays US Aggregate Bond Index

Two of the funds in the Portfolio+ family previously carried the Direxion brand and were relaunched yesterday. The Direxion Daily S&P 500 Bull 1.25X Shares (LLSP) is now the Portfolio+ S&P 500 ETF (PPLC), while the Direxion Daily Small cap Bull 1.25X Shares (LLSC) is now the Portfolio+ S&P Small Cap ETF (PPSC). The former comes with an expense ratio of 0.34% and has $78 million in assets under management, while the latter charges 0.46% and has nearly $7 million in assets.

The Portfolio+ family is mildly leveraged compared with other Direxion products that offer 200% or 300% of the performance of their respective underlying indexes. For this reason, investors are widely advised to hold the funds tactically for short periods of time. While most of the ETF industry touts the virtues of buy-and-hold strategies, that generally doesn’t apply to leveraged or inverse products.

However, because the Portfolio+ family is only applying 25% leverage, the funds are suitable for longer holding periods, which suggests Direxion will see more in the way of sticky assets with these products.

Contact Heather Bell at [email protected]