On Thursday, Direxion announced the launch of the Direxion Low Priced Stock ETF (LOPX). LOPX invests in 50 companies trading at share prices between $2 and $5 at the time of purchase. Low-priced stocks tend to be in the small-to-mid cap range of the market, with higher return potential on average, coupled with higher volatility.
“Investors and traders are increasingly interested in gaining exposure to stocks outside of traditional indexes,” said David Mazza, Managing Director, Head of Product at Direxion. “On average, low priced stocks have four times fewer analyst recommendations than mega caps, highlighting their lack of coverage by investment banks. LOPX provides a way for Main Street investors to take advantage of stocks neglected by Wall Street research, which may be ripe for potential outperformance.”
LOPX seeks investment results, before fees and expenses, of the Solactive Two Bucks Index. The Solactive Two Bucks Index tracks the performance of 50 U.S.-listed companies trading between $2 and $5 at the time of annual reconstitution. The companies will remain unless share prices decline below $1.25 or increase beyond $10 at quarterly rebalance.
As of June 30, 2021, the 50 constituents had a median total market capitalization of $1.3 billion, with total market capitalizations ranging from $60 million to $29 billion. The firms were concentrated in the energy and healthcare sectors. The top ten holdings were as follows:
|Ticker||Name||GICS Sub-Industry||Market Cap ($M)||Weight (%)|
|AMC||AMC EntertainmentHoldings Inc||Movies & Entertainment||$17,946||6.95%|
|TELL||Tellurian Inc||Oil & Gas Exploration & Production||$1,499||3.44%|
|MGI||MoneyGram InternationalInc||Data Processing &Outsourced Services||$818||3.01%|
|AR||Antero Resources Corp||Oil & Gas Exploration & Production||$3,997||2.69%|
|CDEV||Centennial ResourceDevelopment Inc/DE||Oil & Gas Exploration & Production||$1,538||2.50%|
|ENLC||EnLink Midstream LLC||Oil & Gas Storage &Transports||$2,744||2.47%|
|PTEN||Patterson-UTI Energy Inc||Oil & Gas Drilling||$1,557||2.28%|
|BKD||Brookdale Senior Living Inc||Health Care Facilities||$1,511||2.26%|
|CCO||Clear Channel OutdoorHoldings Inc||Advertising||$1,125||2.22%|