ETF Watch: Direxion Plans Bull/Bear Pref Stock Funds

Two ETFs will offer 200% and -200% exposure to index of preferred stocks.
Reviewed by: Staff
Edited by: Staff

A new filing from Direxion outlines the firm’s plan to roll out a leveraged/inverse pair of ETFs tied to the S&P Enhanced Yield North American Preferred Stock Index. The Direxion Daily Income Preferred Bull 2X Shares and Direxion Daily Income Preferred Bear 2X Shares will come with expense ratios of 1.12% and 0.97%, respectively.

The funds’ underlying index targets the 50 highest-yielding preferred stocks listed in the U.S. and Canada, according to the prospectus. Preferred stocks are known for their bondlike qualities, including the income they offer investors.

There are currently nine U.S.-listed ETFs trading on U.S. exchanges with more than $25 billion in total assets under management that cover the preferred stock segment.

Both Direxion funds are slated to list on the NYSE Arca.

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