Direxion, begun trading of 3 new inverse ETFs on S&P Select Sector Indexes, the Direxion Daily Energy Bear 1x Shares (NYSE Arca: ERYY) the Direxion Daily Financial Bear 1x Shares (NYSE Arca: FAZZ) and the Direxion Daily Technology Bear 1x Shares (NYSE Arca: TECZ) on Thursday, April 7, 2016.
Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: ERYY | Exchange: NYSE Arca |
| Name: Direxion Daily Energy Bear 1x Shares | Net Expense Ratio: 0.45% |
FUND OBJECTIVE:
The Direxion Daily Energy Bear 1x Shares seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the performance of the Energy Select Sector Index.
The Fund, under normal circumstances, creates short positions by investing at least 80% of its assets in: swap agreements; futures contracts; options; reverse repurchase agreements; ETFs; and other financial instruments that, in combination, provide inverse exposure to the Energy Select Sector Index. The Fund seeks daily inverse investment results and does not seek to achieve its stated investment objective over a period of time greater than one day.
REFERENCE INDEX:
The Energy Select Sector Index is provided by S&P Dow Jones Indices (Index Provider) and includes domestic (US) companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services. The Index is one of 11 Select Sector Indexes developed and maintained in accordance with the following criteria:
(1) each of the stocks in the Index is also a constituent company of the S&P 500 Index;
(2) each constituent in the S&P 500 Index is assigned to at least one of the Select Sector Indexes; and
(3) the Index is calculated by the Index Provider using a modified “market capitalization” methodology, which is a hybrid between equal weighting and conventional capitalization weighting with the weighting capped for the largest stocks included in the Index. This design ensures that each of the component stocks within a Select Sector Index is represented in a proportion consistent with its percentage with respect to the total market capitalization of such Select Sector Index.
As of February 29, 2016, the Index was comprised of 41 constituents.
Index Top 10 Holdings (04/07/16):
| Exxon Mobil Corp | 18.90% |
| Chevron Corp | 14.80% |
| Schlumberger Ltd | 7.78% |
| Pioneer Natural Resources Co | 4.20% |
| EOG Resources Inc | 3.93% |
| Occidental Petroleum Corp | 3.68% |
| Valero Energy Corp | 3.40% |
| Phillips 66 | 3.28% |
| ConocoPhillips | 2.97% |
| Halliburton Co | 2.96% |
Index Sector Weights (04/07/16):
| Oil, Gas & Consumable Fuels | 82.50% |
| Energy Equipment & Services | 17.50% |
Useful Links:
ERYY Home Page
Category: Equities> Regions> USA> US Sectors/Industries> US Energy
2.
FUND INFORMATION:
| Symbol: FAZZ | Exchange: NYSE Arca |
| Name: Direxion Daily Financial Bear 1x Shares | Net Expense Ratio: 0.45% |
FUND OBJECTIVE:
The Direxion Daily Financial Bear 1x Shares seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the performance of the Financials Select Sector Index.
The Fund,under normal circumstances, creates short positions by investing at least 80% of its assets in: swap agreements; futures contracts; options; reverse repurchase agreements; ETFs; and other financial instruments that, in combination, provide inverse exposure to the Financials Select Sector Index. The Fund seeks daily inverse investment results and does not seek to achieve its stated investment objective over a period of time greater than one day.
REFERENCE INDEX:
The Financials Select Sector Index is provided by S&P Dow Jones Indices (Index Provider) and includes domestic (US) companies from the financials sector which includes the following industries: banks, insurance, real estate investment trusts, capital markets and diversified financial services. The Index is one of 11 Select Sector Indexes developed and maintained in accordance with the following criteria:
(1) each of the stocks in the Index is also a constituent company of the S&P 500 Index;
(2) each constituent in the S&P 500 Index is assigned to at least one of the Select Sector Indexes; and
(3) the Index is calculated by the Index Provider using a modified “market capitalization” methodology, which is a hybrid between equal weighting and conventional capitalization weighting with the weighting capped for the largest stocks included in the Index.
This design ensures that each of the component stocks within a Select Sector Index is represented in a proportion consistent with its percentage with respect to the total market capitalization of such Select Sector Index.
As of February 29, 2016, the Index was comprised of 89 constituents.
Index Top 10 Holdings (04/07/16):
| Berkshire Hathaway Inc | 9.49% |
| Wells Fargo & Co | 7.94% |
| JPMorgan Chase & Co | 7.74% |
| Bank of America Corp | 4.96% |
| Citigroup Inc | 4.38% |
| US Bancorp | 2.35% |
| Simon Property Group Inc | 2.30% |
| American International Group Inc | 2.22% |
| Goldman Sachs Group Inc | 2.19% |
| Chubb Ltd | 1.96% |
Index Sector Weights (04/07/16):
| Diversified Banks | 27.60% |
| REITs | 19.16% |
| Multi-Sector Holdings | 9.68% |
| Asset Management & Custody Banks | 6.89% |
| Regional Banks | 5.86% |
| Property & Casualty Insurance | 5.56% |
| Investment Banking & Brokerage | 4.99% |
| Life & Health Insurance | 4.99% |
| Consumer Finance | 4.85% |
| Specialized Finance | 3.96% |
| Multi-line Insurance | 3.42% |
| Insurance Brokers | 2.74% |
| Real Estate Services | 0.30% |
Useful Links:
FAZZ Home Page
Category: Equities> Regions> USA> US Sectors/Industries> US Financials
3.
FUND INFORMATION:
| Symbol: TECZ | Exchange: NYSE Arca |
| Name: Direxion Daily Technology Bear 1x Shares | Net Expense Ratio: 0.45% |
FUND OBJECTIVE:
The Direxion Daily Technology Bear 1x Shares seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the performance of the Technology Select Sector Index.
The Fund, under normal circumstances, creates short positions by investing at least 80% of its assets in: swap agreements; futures contracts; options; reverse repurchase agreements; ETFs; and other financial instruments that, in combination, provide inverse exposure to the Technology Select Sector Index.
The Fund seeks daily inverse investment results and does not seek to achieve its stated investment objective over a period of time greater than one day.
REFERENCE INDEX:
The Technology Select Sector Index is provided by S&P Dow Jones Indices (Index Provider) and includes domestic (US) companies from the technology sector which includes the following industries: computers & peripherals; software; diversified telecommunications services; communications equipment; semiconductors & semi-conductor equipment; internet software & services; IT services; electronic equipment, instruments & components; wireless telecommunication services; and office electronics.
The Index is one of 11 Select Sector Indexes developed and maintained in accordance with the following criteria:
(1) each of the stocks in the Index is also a constituent company of the S&P 500 Index;
(2) each constituent in the S&P 500 Index is assigned to at least one of the Select Sector Indexes; and
(3) the Index is calculated by the Index Provider using a modified “market capitalization” methodology, which is a hybrid between equal weighting and conventional capitalization weighting with the weighting capped for the largest stocks included in the Index.
This design ensures that each of the component stocks within a Select Sector Index is represented in a proportion consistent with its percentage with respect to the total market capitalization of such Select Sector Index.
As of February 29, 2016, the Index was comprised of 73 stocks.
Index Top 10 Holdings (04/07/16):
| Apple Inc | 14.25% |
| Alphabet Inc | 10.48% |
| Microsoft Corp | 10.30% |
| Facebook Inc | 6.17% |
| AT&T Inc | 5.68% |
| Verizon Communications Inc | 4.58% |
| Intel Corp | 3.61% |
| Visa Inc | 3.47% |
| Cisco Systems Inc | 3.39% |
| Cisco Systems Inc | 3.17% |
Index Sector Weights (04/07/16):
| Software | 18.53% |
| Internet Software & Services | 18.49% |
| Technology Hardware, Storage & Services | 17.81% |
| IT Services | 16.06% |
| Semiconductors & Semiconductor Software | 11.92% |
| Diversified Telecommunications | 11.21% |
| Communications Equipment | 4.32% |
| Electronic Equip & Instruments | 1.66% |
Useful Links:
TECZ Home Page
Category: Equities> Regions> USA> US Sectors/Industries> US Technology
ETFtrack comment:
Here is a comment from Sylvia Jablonski, Managing Director at Direxion:
“Tactical managers are always preparing for potential market pullbacks, but know it’s expensive to change the asset and security allocation of a portfolio. They have to consider capital gains, as well as the costs of using margin and short-selling. Inverse ETFs like these are especially useful for managers who want to hedge against short-term market risk without reconstructing their portfolios. They offer a simple, flexible and low-cost way to hedge.”