Direxion, begun trading a new ETF, the Direxion Daily High Yield Bear 2x Shares (NYSEArca: HYDD) on Thursday, June 16, 2016. Here is a synopsis of the new ETF:
|Name: Direxion Daily High Yield Bear 2x Shares
|Net Expense Ratio: 0.80%
The Direxion Daily High Yield Bear 2x Shares seeks daily investment results, before fees and expenses, of 200% of the inverse (or opposite) of the performance of the Barclays U.S. High Yield Very Liquid Index.
The Fund gains this leveraged exposure by investing in a combination of financial instruments (swap agreements, futures contracts, options, reverse repurchase agreements, ETFs. etc.) that provide inverse leveraged exposure to the underlying securities of the Index.
The Barclays U.S. High Yield Very Liquid Index is a more liquid version of the U.S. Corporate High Yield Index that measures the market of U.S. Dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds. The Index follows the same index construction rules as the U.S. Corporate High Yield Index, but each issue must have been issued within the past 5 years, have a U.S. Dollar 500 million minimum amount outstanding and include only the 3 largest securities from each issuer. The Index is part of the U.S. Universal, Global High-Yield and U.S. Corporate High-Yield Indices.
The Index was created on January 1, 1994. The components of the Index and the percentages represented by various sectors in the Index may change over time. The Fund will concentrate its investment (i.e., hold 25% or more of its total assets in investments that provide inverse exposure to a particular industry or group of industries) in a particular industry or group of industries to approximately the same extent as the Index is so concentrated.
Fund Top Holdings (06/20/16):
|SPDR BARCLAYS HIGH YIELD BOND ETF SWAP
|DREYFUS TREAS PRIME CASH MGMT/INST
|BANK OF NEW YORK CASH RESERVE
HYDD Home Page
Here is a comment from Sylvia Jablonski, Managing Director at Direxion:
“While high yield bonds have been embraced by those looking for yield and higher returns, traders and investors are now preparing for potential pullbacks due to the uncertain U.S. interest rate climate and the corresponding impact on high yield markets. But, it can be expensive to change the asset and security allocation of portfolios. Our High Yield Bear Leveraged Fund is a simple and cost-effective hedge for tactical managers who want to capitalize on these changing markets.”