On Wednesday, May 27, Direxion expanded its coverage of leveraged & inverse ETFs with the launch of four new ETFs. Each of these ETFs takes a leveraged look at a different precious metal or cryptocurrency.
Leaning Into Precious Metals
Two of the new funds focus on highly popular precious metals — gold and silver. The Direxion Daily Gold Bull 2X ETF (UGLD) targets gold. With a net expense ratio of 1.07%, UGLD looks to provide 200% of the daily results of ETFs that reference gold’s price performance, prior to fees and expenses. UGLD intends to use the SPDR Gold Trust (GLD ) as its initial reference fund, but may opt to use other products.
Meanwhile, the Direxion Daily Silver Bull 2X ETF (USLV) takes a look at silver. USLV has a net expense ratio of 1.10%, and similarly to UGLD, seeks to generate 2x the daily performance of exchange-traded products that reflect silver’s performance. The initial reference fund for USLV is the iShares Silver Trust (SLV ), but the fund may likewise choose to employ other reference funds.
See More: A Very NYSE Reunion for Direxion’s Latest Exec Hires
The Crypto Connection
Direxion’s other new funds may offer an appeal to crypto bulls and tactical traders alike. The Direxion Daily Bitcoin Bull 2X ETF BTCU) has a net expense ratio of 1.13% and focuses on bitcoin. BTCU’s goal is to generate, prior to fees and expenses, 200% of the daily results of ETFs that reference bitcoin’s price performance. The iShares Bitcoin Trust ETF (IBIT ) operates as the reference fund for BTCU, but the Direxion fund may instead use a different reference product if the situation calls for it.
Alternatively, those interested in ethereum might want to take a look at the Direxion Daily Ether Bull 2X ETF (EVMU). With a goal of providing, after fees and expenses, 2x the daily performance of ETFs that reference ether’s price movements, EVMU has a net expense ratio of 1.03%. The iShares Ethereum Trust ETF (ETHA ) works as the fund’s reference product, though much like the other Direxion ETFs, this could be subject to change.
See More: Qualcomm AI Hype Could Make This ETF Worth a Trade
Opportunities for Leveraged Traders
“Active traders want precise tools to express short-term views in the markets they’re watching most closely,” said Mo Sparks, chief product officer at Direxion. “Right now, that includes Bitcoin, Ether, gold, and silver. BTCU and EVMU give traders the first and only daily leveraged pure swap spot exposure on digital assets driven by ETF flows, the halving cycle, and regulatory momentum. UGLD and USLV do the same for precious metals, where central bank buying, real rate sensitivity, and the gold-silver ratio are generating directional opportunities. This is the Direxion toolkit, extended.”
This collection of new funds from Direxion comes online at an interesting inflection point for precious metals and cryptocurrency alike. Gold, silver, bitcoin, and ethereum are all decentralized products that are perceived to be inflation hedges, and have been moving in distinct directions following the escalating conflict in the Middle East. As such, investors and advisors with a strong risk tolerance could employ these funds for tactical short-term allocations and could see compelling results.
For more news, information, and analysis, visit the Leveraged & Inverse Content Hub.
