 | |
| Formerly | Potomac Funds |
|---|---|
| Type | Private |
| Industry | Finance |
| Founded | 1997 in Alexandria, Virginia, United States |
| Products | Leveraged, inverse, and thematic exchange-traded funds |
| Website | direxion |
Direxion is a provider of financial products known for its leveraged ETFs. Founded in Alexandria, Virginia, the company also has offices in New York City, Boston, and Hong Kong.
Direxion was founded in 1997 under the name Potomac Funds as a provider of mutual funds. The original name referred to the Potomac River near the company's first office in Alexandria, Virginia. [1] In November 1997, Potomac Funds became the second company to introduce an inverse mutual fund, following a similar move by Rydex Investments in 1994. [2] The company began using the Direxion name in 2006. The use of the letter "X" in the new name was intended to draw attention to the leveraged index funds in the company's offerings. That year the company also opened an office in the Prudential Tower in Boston, Massachusetts. [3]
Direxion launched its first leveraged ETFs in 2008. [4] In November 2008 the company was the first to offer ETFs with 3X leverage, a move that was copied some months later by its competitors ProShares and Rydex Investments. The move made it one of the fastest-growing ETF companies, with its sixteen 3X ETFs reaching a total of $3.4 billion in assets by April 2009. [5] [6] The move towards higher-leverage offerings by the three companies provoked scrutiny from the U.S. Securities and Exchange Commission and the Massachusetts Secretary of the Commonwealth, and a number of broker-dealers stopped selling leveraged ETFs. The criticisms centered around perceived tracking error: the ETFs were designed to achieve the stated multiple of the return on the underlying on a daily basis only (with the cost of the daily rebalancing passed on to investors in the form of higher expense ratios), but commentators suggested that some investors, even institutional investors, had mistakenly tried to use the inverse products as longer-term hedges against their underlyings. [7] [8] [9]
In December 2010, Direxion added 24 ETFs to its range of offerings, including some non-leveraged funds, and continued to expand its offering of non-leveraged funds in 2011. [10] [11] The company's gold miner bull and bear ETFs are among the most-traded gold-related leveraged ETFs. [12] [13] In February 2020, the company announced the launch of its first leveraged environmental, social and corporate governance fund, offering 150% long exposure and 50% short exposure respectively to the best- and worst-scoring companies in the MSCI USA ESG index, with a quarterly rebalance. [14] In March 2020, amidst the 2020 stock market crash, Direxion announced that it would reduce the leverage of ten of its ETFs from 3x to 2x and close eight others. [15] This was part of a broader trend among providers of leveraged ETFs during the first quarter of 2020; nevertheless, Direxion saw inflows of nearly $4 billion during March 2020 alone. [16]
 |
| Direxion Daily | Bear 1X Shares | Bull 2X Shares | Bear 2X Shares | Bull 3X Shares | Bear 3X Shares | References | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Ticker | Comments | Ticker | Comments | Ticker | Comments | Ticker | Comments | Ticker | Comments | ||
| S&P 500 | SPDN | SPUU | SPXL | SPXS | |||||||
| Mid Cap | MDLL | Liquidated Oct. 2015 | MDSS | Registered, never offered | MIDU | MIDZ | Liquidated Apr. 2020 | [17] [18] [19] | |||
| Small Cap | Registered, never offered | SMLL | SMSS | Registered, never offered | TNA | TNZ | [10] [19] | ||||
| Regional Banks | DPST | WDRW | Liquidated Apr. 2020 | [17] | |||||||
| Gold | BAR | BARS | Liquidated Dec. 2014 | [20] | |||||||
| Gold Miners Index | MELT | Liquidated Sep. 2017 | NUGT | 3X until May 2020 | DUST | 3X until May 2020 | NUGT | Became 2X in May 2020 | DUST | Became 2X in May 2020 | [21] [15] |
| Junior Gold Miners Index | JNUG | 3X until May 2020 | JDST | 3X until May 2020 | JNUG | Became 2X in May 2020 | JDST | Became 2X in May 2020 | [15] | ||
| Silver Miners Index | SHNY | Liquidated Sep. 2018 | DULL | Liquidated Sep. 2017 | [21] [22] | ||||||
| Energy | ERYY | Liquidated Sep. 2017 | ERX | 3X until May 2020 | ERY | 3X until May 2020 | ERX | Became 2X in May 2020 | ERY | Became 2X in May 2020 | [21] [15] |
| S&P Oil & Gas Exp. & Prod | GUSH | 3X until May 2020 | DRIP | 3X until May 2020 | GUSH | Became 2X in May 2020 | DRIP | Became 2X in May 2020 | [15] | ||
| Natural Gas Related | GASL | Liquidated Apr. 2020 | GASX | Liquidated Apr. 2020 | [17] | ||||||
| Agribusiness | COWL | Liquidated Sep. 2012 | COWS | Liquidated Sep. 2012 | [23] | ||||||
| Basic Materials | MATL | Liquidated Oct. 2015 | MATS | Liquidated Sep. 2012 | [18] [23] | ||||||
| S&P Biotech | LABS | Liquidated Sep. 2017 | LABU | LABD | [21] | ||||||
| Consumer Staples | SPLZ | Liquidated Sep. 2017 | NEED | LACK | [21] | ||||||
| Cyber Security & IT | HAKK | Liquidated Sept. 2017 | HAKD | Liquidated Apr. 2017 | [21] [24] | ||||||
| Financials | FAZZ | Liquidated Sep. 2017 | FAS | FAZ | [21] | ||||||
| Healthcare | CURE | SICK | Liquidated Sep. 2017 | [21] | |||||||
| Homebuilders & Supplies | NAIL | CLAW | Liquidated Sep. 2017 | [21] | |||||||
| Pharmaceutical & Medical | PILL | Liquidated Apr. 2017 | PILS | Liquidated Apr. 2017 | PILL | Recycled ticker | Registered, never offered | [25] | |||
| Retail | RETL | RETS | Liquidated Sep. 2012 | [23] | |||||||
| Technology | TECZ | Liquidated Sep. 2017 | TECL | TECS | [21] | ||||||
| Utilities | UTLZ | Liquidated Sep. 2017 | UTLL | UTLS | Registered, never offered | [21] [26] | |||||
| BRIC | BRIL | Liquidated Sep. 2012 | BRIS | Liquidated Sep. 2012 | [23] | ||||||
| MSCI Developed Markets | DZK | DPK | Liquidated Apr. 2020 | [17] | |||||||
| FTSE Europe | EURL | EURZ | Liquidated Sep. 2014 | [20] | |||||||
| MSCI European Financials | EUFS | Liquidated Sep. 2017 | EUFL | Liquidated Apr. 2020 | [17] [21] | ||||||
| MSCI Brazil | BRZU | 3X until May 2020 | BRZU | Became 2X in May 2020 | BRZS | Liquidated Sep. 2014 | [15] [20] | ||||
| CSI 300 China A Share | CHAD | CHAU | [27] | ||||||||
| MSCI India | INDL | INDZ | Liquidated Sep. 2012 | [28] | |||||||
| MSCI Japan | JPNL | JPNS | Liquidated Sep. 2014 | [20] [29] | |||||||
| Latin America | LBJ | LHB | Liquidated Sep. 2012 | [23] | |||||||
| MSCI Mexico | MEXX | Registered, never offered | [30] | ||||||||
| Russia | RUSL | 3X until May 2020 | RUSL | Became 2X in May 2020 | RUSS | Liquidated Apr. 2020 | [15] | ||||
| South Korea | KORU | KORZ | Liquidated Sep. 2014 | [20] | |||||||
| 7-10 Year Treasury | SYTL | Liquidated Oct. 2015 | SYTS | Registered, never offered | TYD | TYO | [18] [19] | ||||
| Total Bond Market | SAGG | Liquidated Apr. 2020 | Registered, never offered | Registered, never offered | [10] [17] | ||||||
| Direxion daily Semicondct Bull 3X ETF | SOXL | ||||||||||
| Ticker | Name | Comments | References |
|---|---|---|---|
| ESNG | Direxion MSCI USA ESG - Leaders vs. Laggards ETF | Registered in February 2020 | [14] |
| WFH | Direxion Work From Home ETF | Registered in April 2020 | [31] |
An index fund is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments. While index providers often emphasize that they are for-profit organizations, index providers have the ability to act as "reluctant regulators" when determining which companies are suitable for an index. Those rules may include tracking prominent indexes like the S&P 500 or the Dow Jones Industrial Average or implementation rules, such as tax-management, tracking error minimization, large block trading or patient/flexible trading strategies that allow for greater tracking error but lower market impact costs. Index funds may also have rules that screen for social and sustainable criteria.
A closed-end fund (CEF) or closed-ended fund is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund. Unlike open-end funds, new shares in a closed-end fund are not created by managers to meet demand from investors. Instead, the shares can be purchased and sold only in the market, which is the original design of the mutual fund, which predates open-end mutual funds but offers the same actively-managed pooled investments.
The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of December 31, 2020, more than $5.4 trillion was invested in assets tied to the performance of the index.
An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the day on stock exchanges while mutual funds are bought and sold from the issuer based on their price at day's end. An ETF holds assets such as stocks, bonds, currencies, futures contracts, and/or commodities such as gold bars, and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur. Most ETFs are index funds: that is, they hold the same securities in the same proportions as a certain stock market index or bond market index. The most popular ETFs in the U.S. replicate the S&P 500 Index, the total market index, the NASDAQ-100 index, the price of gold, the "growth" stocks in the Russell 1000 Index, or the index of the largest technology companies. With the exception of non-transparent actively managed ETFs, in most cases, the list of stocks that each ETF owns, as well as their weightings, is posted daily on the website of the issuer. The largest ETFs have annual fees of 0.03% of the amount invested, or even lower, although specialty ETFs can have annual fees well in excess of 1% of the amount invested. These fees are paid to the ETF issuer out of dividends received from the underlying holdings or from selling assets.
The Vanguard Group, Inc. is an American registered investment advisor based in Malvern, Pennsylvania with about $7 trillion in global assets under management, as of January 13, 2021. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, variable and fixed annuities, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered one of the Big Three index fund managers that dominate corporate America.
MSCI Inc. is an American finance company headquartered in New York City. MSCI is a global provider of equity, fixed income, real estate indexes, multi-asset portfolio analysis tools, ESG and climate products. It operates the MSCI World, MSCI All Country World Index (ACWI), MSCI Emerging Markets Indexes.
iShares is a collection of exchange-traded funds (ETFs) managed by BlackRock, which acquired the brand and business from Barclays in 2009. The first iShares ETFs were known as World Equity Benchmark Shares (WEBS) but have since been rebranded.
ETF Securities is an asset management firm that issues exchange-traded funds (ETFs) primarily in Australia.
Dimensional Fund Advisors, L.P. is a private investment firm headquartered in Austin, Texas. Dimensional was founded in Chicago in 1981 by David Booth, Rex Sinquefield and Larry Klotz. The company has affiliates within 13 offices in the U.S., Canada, U.K., Germany, Netherlands, Australia, Singapore, and Japan. Dimensional maintains U.S. offices in Charlotte, North Carolina and Santa Monica, California and has affiliate offices globally. The company is owned by its employees, board members and outside investors.
An inverse exchange-traded fund is an exchange-traded fund (ETF), traded on a public stock market, which is designed to perform as the inverse of whatever index or benchmark it is designed to track. These funds work by using short selling, trading derivatives such as futures contracts, and other leveraged investment techniques.
BetaShares is an Australian provider of exchange-traded funds (ETFs) and other ASX-traded funds. The company introduced a range of products into the Australian ETF landscape, including Australia's first currency hedged ETF, Australia's first range of commodity ETFs, Australia's first range of currency ETFs, Australia's first ETF using fundamentally based indexes and a range of short exchange traded products. BetaShares is based in Sydney, Australia with offices in Melbourne and Brisbane.
Indxx, LLC is a global diversified financial services firm. Founded in 2005 by Mexx Co-founder PK Sen Sharma, the company has offices in New Delhi, India; New York, USA; Miami, USA and Prague, Czech Republic. It currently has over 100 employees spread across four main business groups: Indxx Indices, Custom Indices, Client Indices and Equity Basket Calculation.
Boost ETP is an independent boutique Exchange Traded Products (ETP) provider, based in London, United Kingdom. Boost ETP is the first asset management firm in Europe to offer 3x leveraged ETPs and 3x short ETPs. The first Boost ETP products became available on 6 December 2012 on the London Stock Exchange.
Christian Magoon is an American entrepreneur, author, speaker and business executive, best known for being CEO of Amplify ETFs with a track record of innovation in the ETF business. He specializes in exchange-traded funds.
E Fund Management Co., Limited is a Hong Kong-based asset management company, and a subsidiary of E Fund Management Co., Ltd, established in Guangzhou China in 2001. E Fund Management Co., Ltd currently manages US$223 billion as of March 31, 2020. As of 2015, it is licensed by the Securities and Futures Commission of Hong Kong and the U.S. Securities and Exchange Commission It is also licensed RQFII and QFII investor.
Wealthsimple Inc. is a Canadian online investment management service focused on millennials. The firm was founded in September 2014 by Michael Katchen and is based in Toronto. As of November 2021, the firm holds over C$15 billion in assets under management. It is primarily owned by Power Corporation indirectly at 70.1% through investments made through their holdings in Power Financial, IGM Financial and Portag3.
Horizons ETFs Management (Canada) Inc. is a financial services company that offers exchange-traded funds. In April 2017, Horizons began offering the first cannabis industry focused exchange-traded fund (ETF), Horizons Marijuana Life Sciences Index ETF. The company is also the only provider of leveraged ETFs and the fourth-largest ETF provider in Canada with more than CAD$14 billion in assets as of July 2020.
ProShares is an issuer of exchange-traded funds, including inverse exchange-traded funds, and similar products.