New 3x Inverse & Leveraged Treasury ETFs Launch
April 16, 2009
With Treasuries still offering rather skimpy yields, Direxion on Thursday came out with two sets of new exchange-traded funds allowing investors to juice returns in government-backed long-term bond markets.
The four new DirexionShares 3x ETFs are leveraged bull and bear index-based portfolios that try to either provide 300% of the daily performance or 300% of the inverse of the daily performance of the NYSE Current 10- and 30-Year U.S. Treasury indexes.
In a statement, DirexionShares President Dan O'Neill said: "We believe that these four new ETFs further our efforts to meet investor demand for tactical tools designed for active portfolio management, now specific to the Treasury markets."
He added that many advisers and institutional investors are using Direxion 3x ETFs to magnify their daily market exposures, while others are using the firm's family of inverse and leveraged ETFs to implement short-term hedge positions in their portfolios.
According to Direxion, its family of 20 DirexionShares ETFs "represent the highest amount of leverage currently available in the ETF space."
The four new Direxion ETFs are:
The short funds compete with existing products from ProShares, which offers the ProShares UltraShort 7-10 Year Treasury ETF (NYSE Arca: PST) and the ProShares UltraShort 20+ Year Treasury ETF (NYSE Arca: TBT). Both of those funds provide -200% exposure to their respective benchmarks.
Both the ProShares and the new Direxion funds charge 0.95% in annual expenses.
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