From the June 2009 issue of Research Magazine • Subscribe!

Direxion Adds Leveraged-Bond ETFs

Direxion Funds has introduced four new ETFs that use triple leverage.

The new funds are linked to NYSE Current U.S. Treasury Indexes and their annual expense ratios are 0.95 percent.

The funds are as follows:

o Direxion Daily 10-Year Treasury Bull 3x Shares (TYD)

o Direxion Daily 10-Year Treasury Bear 3x Shares (TYO)

o Direxion Daily 30-Year Treasury Bull 3x Shares (TMF)

o Direxion Daily 30-Year Treasury Bear 3x Shares (TMV)

The two NYSE Current U.S. Treasury Indexes are one-security fixed-income indexes that consist of the most recently issued respective 10-year and 30-year U.S. Treasury bonds. The indexes are designed to track the performance of current on-the-run government securities. On a monthly basis the indexes are rebalanced after the close of trading on the month's last business day. At that time, each index's bond along with any relevant accrued interest and coupon payments received will be rolled into a new U.S. Treasury security if one was more recently issued during the month.

The Direxion Shares bond ETFs attempt to deliver daily magnified exposure of 300 percent to 10- and 30-year Treasury indexes. Short ETFs and those with leverage are among the fastest growing segments of the ETF marketplace.

Direxion Shares has changed the name of all its funds to include the word "daily." According to the company, this update better reflects the fact these funds seek daily investment goals and should be used strictly as short-term trading tools.

At the end of March, Direxion Shares ETFs had $2.93 billion in assets under management. Including the new offerings, the Boston-based company now manages a total of 20 ETFs.


Ron DeLegge is the San Diego-based editor of www.etfguide.com.


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