Leveraged and inverse mega-cap ETFs are on the way thanks to Direxion Funds
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With a suite of ETFs it plans to create, Direxion Funds aims to give investors a chance to make leveraged bets on, and bearish bets against, some of the biggest household names on Wall Street. The firm plans to provide leveraged and inverse ETFs for individuals who are either bullish or bearish on mega-cap stocks, like Meta Platforms (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Alphabet (NASDAQ:GOOG)
(NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA).
Direxion has filed a prospectus with the U.S. Securities and Exchange Commission for 21 exchange traded funds that will allow investors to take either a -1X, -2X, or +2X approach on each of the mega-cap names above. See below the breakdown of ETFs:
1X Bear Funds
Direxion Daily META Bear 1X Shares
Direxion Daily NFLX Bear 1X Shares
Direxion Daily AAPL Bear 1X Shares
Direxion Daily MSFT Bear 1X Shares
Direxion Daily AMZN Bear 1X Shares
Direxion Daily GOOGL Bear 1X Shares
Direxion Daily NVDA Bear 1X Shares
2X Bear Funds
Direxion Daily META Bear 2X Shares
Direxion Daily NFLX Bear 2X Shares
Direxion Daily AAPL Bear 2X Shares
Direxion Daily MSFT Bear 2X Shares
Direxion Daily AMZN Bear 2X Shares
Direxion Daily GOOGL Bear 2X Shares
Direxion Daily NVDA Bear 2X Shares
2X Bull Funds
Direxion Daily META Bull 2X Shares
Direxion Daily NFLX Bull 2X Shares
Direxion Daily AAPL Bull 2X Shares
Direxion Daily MSFT Bull 2X Shares
Direxion Daily AMZN Bull 2X Shares
Direxion Daily GOOGL Bull 2X Shares
Direxion Daily NVDA Bull 2X Shares
All of the 1X Bear Funds aims to deliver investors a -100% daily return on the underlying stock. In contrast, the Bear 2X Shares and Bull 2X Shares Funds will provide daily -200% and +200% returns on the underlying stock.
Therefore, if a stock falls by $1, the accompanying 1X Bear Fund will rise by nearly $1 for the single day. Moreover, the Bear 2X Funds will decrease by $2, and the Bull 2X Funds will increase by nearly $2 for the single day.
For the ETFs to accomplish their investment goals, the funds will invest primarily in swap agreements that provide leveraged and inverse exposure to the underlying stock in the ETF.
Direxion Funds has also not provided any ticker symbols or expense ratios attached to the ETFs.
Tesla will also be covered as the issuer filed a separate prospectus that provides inverse and leveraged options on the EV maker.