On Thursday, Direxion launched four new leveraged and inverse ETFs that bring single-stock exposure to the semiconductor sector.
The Direxion Daily AVGO Bull 2X Shares (AVL) and the Direxion Daily AVGO Bear 1X Shares (AVS) focus on Broadcom. Meanwhile, the Direxion Daily Bull 2X Shares MUU and the Direxion Daily MU Bear 1X Shares (MUD) look at Micron Technologies.
“Direxion is the leader in the semiconductor sector of the leveraged and inverse ETF universe, with over $13B in assets across the suite,” added Ed Egilinsky, managing director at Direxion. “With the launch of the Broadcom and Micron Technologies ETFs, Direxion now has the largest suite of single stock leveraged and inverse ETFs as well.”
As the bullish funds, AVL and MUU seek to provide leveraged results to daily price change of their underlying security. Inversely, AVS and MUD aim to generate -100% of their underlying security’s daily price change.
Swap Agreement Strategy
To achieve these investment objectives, all four funds use swap agreements. These funds specifically aim to achieve results based on daily percentage changes, and not for any alternate period.
A number of different assets may be used by these funds to serve as collateral for the swap agreements. These assets can include U.S. government securities, money market funds, short-term bond ETFs, and corporate debt securities.
Direxion advises that these funds are intended for investors with a thorough understanding of the underlying companies. While these funds can bring in strong results, they come with the inherent risk present in seeking daily investment performance.
With the launch of these four new funds, Direxion is continuing to expand its coverage of the semiconductor field. Just last week, Direxion launched the Direxion Daily TSM Bull 2X Shares (TSMX) and the Direxion Daily TSM Bear 1X Shares (TSMZ).
For more news, information, and analysis, visit the Leveraged & Inverse Channel.
