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Portfolio > Asset Managers

Global IPO Long/Short Exposure

By Kate McBride

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As investment strategists call for ever-more diverse asset allocations in client portfolios, fund companies are responding by offering access to markets that, even today, are off the beaten path.

Direxion has launched a new mutual fund that provides investors with access to global initial public offerings (IPOs), with a twist. The fund can go long or short these IPOs. The Direxion Long/Short Global IPO fund (DXIIX), is an actively-managed fund that the firm says “is a non-correlating, liquid fund that offers potential diversification to any portfolio,” according to the company’s March 1 news release.

With non-correlative assets such an elusive part of many portfolios, this could be worth a closer look. The fund’s objective is “capital appreciation through a risk-controlled portfolio. To achieve this, the Fund invests in IPOs and spin-offs using a combined long/short strategy,” and is managed by sub-advisor IPOX Capital Management, LLC.

Dan O’Neill, President of Direxion Funds, stated in the announcement: “IPOs have substantial economic significance, and are the lifeblood of global Equity Capital Markets activity.” He adds, “We view IPOs as a separate asset class which, globally, can diverge significantly over time from the performance of traditional benchmark indices. For investment professionals and sophisticated investors who seek tactical exposure to alternative asset classes, the Direxion Long/Short Global IPO fund provides an opportunity to take advantage of this relatively unexplored realm with a hedged strategy that helps to mitigate risk.”

See the full news release, here.

Comments? Please send them to [email protected]. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.

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