Direxion Funds has launched the Commodity Trends Strategy, benchmarked to the Standard & Poor’s Commodity Trends Indicator (S&P CTI). The Fund gives investment advisors and investors access to a” diversified, open-ended commodity mutual fund that allows them to benefit from both rising and falling commodity prices.”
The S&P CTI is an index that tracks both rising and falling price trends in the commodity markets, and is comprised of 16 commodity futures grouped into six sectors–Energy, Industrial Materials, Precious Metals, Livestock, Grains, and Softs (such as coffee, cocoa, cotton, and sugar). The index positions each sector either long or short based on its price behavior.
“Other commodity products take a long only position in commodities, limiting their potential to contribute to a portfolio’s long-term performance,’ said Dan O’Neill, Direxion Funds’ president and CIO, in a statement. “The Commodity Trends Strategy Fund can serve as a powerful diversification tool for investors, allowing them to capitalize on both surges and declines in commodity demand and prices.”
The Commodity Trends Strategy Fund offers investors an investment option with low volatility as well as low correlation to both the stock and bond markets, giving the Fund the potential to outperform in all market environments, according to Direxion.
“Our clients were asking for a better way to invest in and capitalize on the volatility of the commodities markets,” said Bill Franca, Direxion Funds’ executive vice president of sales and distribution, in announcing the launch of the fund. “This Fund was created in direct response to those requests. We can now offer our investors a fund that will provide increased portfolio diversification through a low-correlating investment that takes full advantage of fluctuations in commodity prices.”