Direxion Grows Semiconductor ETF Suite With Broadcom, Micron

The two new single stock ETFs offer leveraged and inverse exposure to the chip makers.

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DJ
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Finance Reporter
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Reviewed by: etf.com Staff
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Edited by: James Rubin

Direxion has expanded its suite of semiconductor-focused single stock ETFs, unveiling four new funds tracking Broadcom and Micron Technologies, the issuer announced Thursday.

The Direxion Daily AVGO Bull 2X Shares (AVL), Direxion Daily AVGO Bear 1X Shares (AVS), Direxion Daily MU Bull 2X Shares (MUU), and Direxion Daily MU Bear 1X Shares (MUD) began trading Thursday.

The new products will give investors more options for navigating a sector that has grown significantly over the past year amid a boom in artificial intelligence but also faces increased regulatory scrutiny and geopolitical uncertainties. 

Edward Egilinsky, managing director at Direxion, explained that the company’s decision to introduce Broadcom and Micron ETFs builds on its existing success in the semiconductor space.

The firm’s largest product is currently the $11.9 billion Direxion Daily Semiconductor Bull 3X Shares (SOXL), which tracks the PHLX Semiconductor Sector Index.

SOXL 3 Month Fund Flows

Egilinsky noted that high interest in semiconductors and artificial intelligence, combined with the sector's volatility, make these attractive trading vehicles.

Direxion’s single-stock, semiconductor ETFs had tracked Nvidia and Taiwan Semiconductor Manufacturing Company. Those two firms, along with Micron and Broadcom rank among the world's largest semiconductor firms by market capitalization. 

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“People could pick and choose in terms of, 'hey, if there's some things that they're focused on, one [semiconductor] versus another, they may want to trade that,'” Egilinsky said.

Egilinsky highlighted several factors that could affect the semiconductor sector in the coming months.

“You have a lot going on in the regulatory environment in terms of [semiconductors],” Egilinsky said. “The chip act that was instituted in the U.S., the ongoing situation with China, the election coming up–how that might affect the tech sector in general and the semiconductor space in particular–and AI, what's going on now in terms of just the government scrutiny.”

Direxion's single stock ETF franchise has amassed nearly $4 billion in assets.

Targeted Tools For Active Traders

Egilinsky said that these products are designed for sophisticated, short-term traders.

“These are risky vehicles, high risk, high reward vehicles,” Egilinsky said. “These are going to be for active short-term traders that are sophisticated retail investors or institutions or financial professionals that want to trade. But certainly these are not for everybody, and they're not for individuals that are risk averse.”

Broadcom shares were recently trading at $186.14, up slightly, while Micron was changing hands at $105.88, a more than 4% gain. 

A graduate of The University of Texas, Arlington with a BA in Communications, DJ has covered retirement plans, mortgage news, and financial advisor trends. His background includes producing daily content, managing newsletters, and engaging with industry experts. DJ is excited to contribute to ETF coverage and learn more about the $10-trillion-dollar ETF industry. Outside of work, he enjoys exploring New York City's food scene, anime, and video games.