ETF Watch: Direxion Launches Inverse Large Cap Fund

June 08, 2016

Today Direxion launched an ETF on the NYSE Arca that fills what could be seen as a puzzling hole in its lineup. The Direxion Daily S&P 500 Bear 1X Shares (SPDN) offers the inverse of the daily return of the S&P 500, the world’s most widely followed index.

That said, the fund faces stiff competition from the established fund in the space, the $3 billion ProShares Short S&P500 (SH). However, SPDN can claim a strong advantage in terms of costs: It charges an expense ratio of 0.47%. That’s a little more than half of the 0.90% charged by SH.

SPDN was formerly known in registration as the Direxion Daily Large Cap Bear 1X Shares and was to track the Russell 1000 Index. 

Whiskey Focused Fund Planned

ETF Managers Group, the firm behind last year’s Restaurant ETF (BITE), is planning to roll out another consumer discretionary fund, this one targeting the whiskey and bourbon “economy.” The Spirited Funds ETFMG Bourbon & Whiskey Economy ETF (WSKY) will cover 20 companies involved in every step in the process, from producing the crops used to make the beverages to their actual consumption.

Companies basically fall into six buckets, according to the prospectus, those:

  • That produce whiskey or bourbon
  • That provide the ingredients used in the process from initial production, through distillation, aging and storage
  • That raise, manage and harvest the crops involved in the process
  • Involved in the management of byproducts of the whiskey and bourbon production process
  • Involved in distribution, sales and marketing of whiskey and bourbon
  • Involved in the consumption of bourbon or whiskey

The selection universe is established via research and analysis of publicly available information, and to be eligible to be a component, a company must have at least $250 million in market capitalization. Company weightings are based on a firm’s revenues from its bourbon- and whiskey-related revenues and the growth rate of its involvement in the whiskey and bourbon economy. Distillers will have a weighting between 50% and 95% in the index, while distributors and suppliers comprise between 5% and 50% of the index, the prospectus said.

The filing did not include an expense ratio or listing exchange.

Contact Heather Bell at [email protected].

 

 

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