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Direxion

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Direxion
FormerlyPotomac Funds
Company typePrivate
IndustryFinance
Founded1997; 27 years ago (1997) in Alexandria, Virginia, United States
ProductsLeveraged, inverse, and thematic exchange-traded funds
Websitedirexion.com

Direxion is a provider of financial products known for its leveraged ETFs. Founded in Alexandria, Virginia, the company also has offices in New York City, Boston, and Hong Kong.

History

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Direxion was founded in 1997 under the name Potomac Funds as a provider of mutual funds. The original name referred to the Potomac River near the company's first office in Alexandria, Virginia.[1] In November 1997, Potomac Funds became the second company to introduce an inverse mutual fund, following a similar move by Rydex Investments in 1994.[2] The company began using the Direxion name in 2006. The use of the letter "X" in the new name was intended to draw attention to the leveraged index funds in the company's offerings. That year the company also opened an office in the Prudential Tower in Boston, Massachusetts.[3]

Direxion launched its first leveraged ETFs in 2008.[4] In November 2008 the company was the first to offer ETFs with 3X leverage, a move that was copied some months later by its competitors ProShares and Rydex Investments. The move made it one of the fastest-growing ETF companies, with its sixteen 3X ETFs reaching a total of $3.4 billion in assets by April 2009.[5][6] The move towards higher-leverage offerings by the three companies provoked scrutiny from the U.S. Securities and Exchange Commission and the Massachusetts Secretary of the Commonwealth, and a number of broker-dealers stopped selling leveraged ETFs. The criticisms centered around perceived tracking error: the ETFs were designed to achieve the stated multiple of the return on the underlying on a daily basis only (with the cost of the daily rebalancing passed on to investors in the form of higher expense ratios), but commentators suggested that some investors, even institutional investors, had mistakenly tried to use the inverse products as longer-term hedges against their underlyings.[7][8][9]

In December 2010, Direxion added 24 ETFs to its range of offerings, including some non-leveraged funds, and continued to expand its offering of non-leveraged funds in 2011.[10][11] The company's gold miner bull and bear ETFs are among the most-traded gold-related leveraged ETFs.[12][13] In February 2020, the company announced the launch of its first leveraged environmental, social and corporate governance fund, offering 150% long exposure and 50% short exposure respectively to the best- and worst-scoring companies in the MSCI USA ESG index, with a quarterly rebalance.[14] In March 2020, amidst the 2020 stock market crash, Direxion announced that it would reduce the leverage of ten of its ETFs from 3x to 2x and close eight others.[15] This was part of a broader trend among providers of leveraged ETFs during the first quarter of 2020; nevertheless, Direxion saw inflows of nearly $4 billion during March 2020 alone.[16]

List of funds

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Leveraged and inverse ETFs

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Direxion Daily Bear 1X Shares Bull 2X Shares Bear 2X Shares Bull 3X Shares Bear 3X Shares References
Ticker Comments Ticker Comments Ticker Comments Ticker Comments Ticker Comments
S&P 500 SPDN   SPUU   SPXL   SPXS  
Mid Cap MDLL Liquidated Oct. 2015 MDSS Registered, never offered MIDU   MIDZ Liquidated Apr. 2020 [17][18][19]
Small Cap   Registered, never offered SMLL   SMSS Registered, never offered TNA   TNZ   [10][19]
Regional Banks DPST   WDRW Liquidated Apr. 2020 [17]
Gold BAR   BARS Liquidated Dec. 2014 [20]
Gold Miners Index MELT Liquidated Sep. 2017 NUGT 3X until May 2020 DUST 3X until May 2020 NUGT Became 2X in May 2020 DUST Became 2X in May 2020 [21][15]
Junior Gold Miners Index JNUG 3X until May 2020 JDST 3X until May 2020 JNUG Became 2X in May 2020 JDST Became 2X in May 2020 [15]
Silver Miners Index SHNY Liquidated Sep. 2018 DULL Liquidated Sep. 2017 [21][22]
Energy ERYY Liquidated Sep. 2017 ERX 3X until May 2020 ERY 3X until May 2020 ERX Became 2X in May 2020 ERY Became 2X in May 2020 [21][15]
S&P Oil & Gas Exp. & Prod GUSH 3X until May 2020 DRIP 3X until May 2020 GUSH Became 2X in May 2020 DRIP Became 2X in May 2020 [15]
Natural Gas Related GASL Liquidated Apr. 2020 GASX Liquidated Apr. 2020 [17]
Agribusiness COWL Liquidated Sep. 2012 COWS Liquidated Sep. 2012 [23]
Basic Materials MATL Liquidated Oct. 2015 MATS Liquidated Sep. 2012 [18][23]
S&P Biotech LABS Liquidated Sep. 2017 LABU   LABD   [21]
Consumer Staples SPLZ Liquidated Sep. 2017 NEED   LACK   [21]
Cyber Security & IT HAKK Liquidated Sept. 2017 HAKD Liquidated Apr. 2017 [21][24]
Financials FAZZ Liquidated Sep. 2017 FAS   FAZ   [21]
Healthcare CURE   SICK Liquidated Sep. 2017 [21]
Homebuilders & Supplies NAIL   CLAW Liquidated Sep. 2017 [21]
Pharmaceutical & Medical PILL Liquidated Apr. 2017 PILS Liquidated Apr. 2017 PILL Recycled ticker   Registered, never offered [25]
Retail RETL   RETS Liquidated Sep. 2012 [23]
Semiconductors SOXL   SOXS   [citation needed]
Technology TECZ Liquidated Sep. 2017 TECL   TECS   [21]
Utilities UTLZ Liquidated Sep. 2017 UTLL   UTLS Registered, never offered [21][26]
BRIC BRIL Liquidated Sep. 2012 BRIS Liquidated Sep. 2012 [23]
MSCI Developed Markets DZK   DPK Liquidated Apr. 2020 [17]
FTSE Europe EURL   EURZ Liquidated Sep. 2014 [20]
MSCI European Financials EUFS Liquidated Sep. 2017 EUFL Liquidated Apr. 2020 [17][21]
MSCI Brazil BRZU 3X until May 2020 BRZU Became 2X in May 2020 BRZS Liquidated Sep. 2014 [15][20]
CSI 300 China A Share CHAD   CHAU   [27]
MSCI India INDL   INDZ Liquidated Sep. 2012 [28]
MSCI Japan JPNL   JPNS Liquidated Sep. 2014 [20][29]
Latin America LBJ   LHB Liquidated Sep. 2012 [23]
MSCI Mexico MEXX     Registered, never offered [30]
Russia RUSL 3X until May 2020 RUSL Became 2X in May 2020 RUSS Liquidated Apr. 2020 [15]
South Korea KORU   KORZ Liquidated Sep. 2014 [20]
7-10 Year Treasury SYTL Liquidated Oct. 2015 SYTS Registered, never offered TYD   TYO   [18][19]
Total Bond Market SAGG Liquidated Apr. 2020   Registered, never offered   Registered, never offered [10][17]

Thematic and other funds

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Ticker Name Comments References
ESNG Direxion MSCI USA ESG - Leaders vs. Laggards ETF Registered in February 2020 [14]
WFH Direxion Work From Home ETF Registered in April 2020 [31]

References

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  1. ^ "Potomac Funds Stakes Out New Direxion". Financial Planning. 2006-05-15. Retrieved 2020-05-13.
  2. ^ Anand, Shefali (2008-03-29). "Investors Give Gloom Funds a Bear Hug". The Wall Street Journal. Archived from the original on 2020-05-13. Retrieved 2020-05-13.
  3. ^ "Recently Rebranded Direxion Tweaks Funds". Institutional Investor. 2006-05-24. Retrieved 2020-05-12.
  4. ^ Beerens, Marie (2019-02-01). "Direxion Expands Beyond Leveraged, Inverse ETFs With New Fund Suite". Investor's Business Daily. Retrieved 2020-05-12.
  5. ^ "Leveraged ETFs With 300% Exposures Set To Launch". ETF.com. 2008-11-03. Retrieved 2020-05-13.
  6. ^ Coleman, Murray (2009-04-22). "ProShares Files For 3X Leverage On 94 New ETFs". ETF.com. Retrieved 2020-05-13.
  7. ^ Steward, Martin (September 2009). "Top gear?". IPE Magazine. Retrieved 2020-05-13.
  8. ^ Spence, John (2010-04-13). "Leveraged ETFs Are Under SEC Scrutiny". The Wall Street Journal. Archived from the original on 2020-05-13. Retrieved 2020-05-13.
  9. ^ Wong, Raymund (2009-11-10). "United States: Rebalancing Act: A Primer On Leveraged and Inverse ETFs". Mondaq.com. Retrieved 2020-05-13.
  10. ^ a b c Cumman, Jared (2010-12-14). "Direxion Unveils Tidal Wave Of ETF Proposals". ETF Database. Retrieved 2020-05-12.
  11. ^ "Direxion to expand non-leveraged ETF lineup". Reuters. 2011-11-28. Retrieved 2020-05-13.
  12. ^ Rosenberg, Alex (2016-03-02). "The strange ETF that's doubled this year". CNBC. Retrieved 2020-05-12.
  13. ^ Dierking, David (2020-04-16). "The 4 Most Traded 2x and 3x Gold ETFs". Investopedia. Retrieved 2020-05-12.
  14. ^ a b Temple-West, Patrick (2020-02-06). "Direxion launches high-risk sustainable investment ETF". Financial Times. Archived from the original on 2020-02-06. Retrieved 2020-05-12.
  15. ^ a b c d e f g Ballentine, Claire (2020-03-23). "Direxion Cuts Leverage on 10 Funds to 200%, Closes Eight Others". Bloomberg News. Retrieved 2020-05-12.
  16. ^ "Leveraged ETF Blowups Draw SEC Scrutiny Amid Market Turmoil". Bloomberg Law. 2020-04-04. Retrieved 2020-05-13.
  17. ^ a b c d e f Kiesche, Liz (2020-03-23). "Direxion cuts leverage on 10 funds, closes eight funds". Seeking Alpha. Retrieved 2020-05-12.
  18. ^ a b c "Direxion To Close Down 3 Leveraged ETFs". Zacks.com. 2015-10-15. Archived from the original on 2015-10-16. Retrieved 2020-05-13.
  19. ^ a b c Tran, Hung (2014-07-21). "Daily ETF Watch". ETF.com. Retrieved 2020-05-13.
  20. ^ a b c d e "Direxion To Shut Down BARS, The 3x Gold Bear ETF". Seeking Alpha. 2014-12-24. Retrieved 2020-05-12.
  21. ^ a b c d e f g h i j k l Kim, Crystal (2017-09-05). "12 Inverse and Leveraged ETFs to Bite the Dust". Barron's. Archived from the original on 2017-09-09. Retrieved 2020-05-13.
  22. ^ "The First Leveraged, Inverse Silver Miner ETFs". Yahoo! Finance. 2016-09-09. Retrieved 2020-05-13.
  23. ^ a b c d e Rowland, Ron (2012-08-20). "Direxion Closing Nine Leveraged And Inverse ETFs". Seeking Alpha. Retrieved 2020-05-13.
  24. ^ Dieterich, Chris (2015-07-01). "Direxion Preps for 2X Cyber Security ETFs". Barron's. Retrieved 2020-05-13.
  25. ^ Watson, George (2017-11-15). "Direxion launches 3x leveraged pharmaceuticals ETF". ETF Strategy. Retrieved 2020-05-13.
  26. ^ "Direxion Files for 16 New Leveraged Bull And Bear ETFs". ETF Daily News. 2010-06-28. Retrieved 2020-05-13.
  27. ^ Fabian, David (2015-04-23). "Direxion Launches New Leveraged China A-Share ETF". Yahoo! Finance. Retrieved 2020-05-15.
  28. ^ Magoon, Christian (2012-08-07). "This Bearish 3X India ETF Will Liquidate In September (INDZ)". ETF Daily News. Retrieved 2020-05-13.
  29. ^ Ludwig, Olly (2013-06-26). "Direxion Debuts Bull/Bear 3X Japan ETFs". ETF.com. Retrieved 2020-05-12.
  30. ^ "Direxion Files For 8 New Triple-Leveraged Global ETFs". Nasdaq.com. 2013-04-10. Retrieved 2020-05-13.
  31. ^ Greifeld, Katherine (2020-04-08). "There's a Work-From-Home ETF Coming and Its Ticker is WFH". Bloomberg Quint. Archived from the original on 2020-05-14. Retrieved 2020-05-14.
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