On Wednesday, Direxion announced that it has released two new single-stock ETFs.
These new funds offer distinct leveraged and inverse strategies that focus on Advanced Micro Devices, Inc. (AMD). Each fund is actively managed and has a net expense ratio of 97 basis points.
The Direxion Daily AMD Bull 2X Shares (AMUU) looks to generate 200% of the daily performance of AMD common stock. Inversely, the Direxion Daily AMD Bear 1X Shares (AMDD) looks to provide -100% of the company’s daily performance.
Direxion primarily utilizes swap agreements to generate either leveraged or inverse exposure for its funds. Both of these funds will attempt to perform their strategy, regardless of how the company or greater market is performing.
Capturing Investor Interest in AMD
As a key chipmaker in the ongoing AI race, AMD remains a company frequently monitored by investors. The company recently saw its shares drop following its Q4 earnings call. With that in mind, traders may see opportunities to bet on the stock’s short-term movements.
“The semiconductor space in general has been an area where active traders are looking to participate,” said Ed Egilinsky, managing director, head of sales and distribution, and head of alternative investments at Direxion. “There’s a lot of trader demand for semis in particular, with what’s going on with AI and the CapEx spending by a lot of companies to participate in AI and data centers.”
Leveraged and inverse ETFs are traditionally employed as means to make near-term bets on company and sector performance. That being said, traders could also use inverse ETFs to hedge their exposure to particular companies. However, these funds are designed for advisors and investors that thoroughly understand the risk/reward profile that daily leveraged and inverse funds offer.
A leading provider in leveraged & inverse strategies, Direxion has over 90 ETFs listed in the United States. These funds account for over $46 billion in assets under management.
For more news, information, and analysis, visit the Leveraged & Inverse Channel.
