Direxion introduces triple-leverage ETFs

Direxion Shares this week for its first time launched ETFs that have a goal of returning 300% of the performance of their underlying indexes, either on the positive side or the inverse. The Direxion ETFs will use derivatives such as futures and swaps to maintain leverage against the indexes. The eight ETFs will include both bull and bear funds measured against four indexes — the Russell 1000, Russell 2000, Russell 1000 Energy and Russell 1000 Financial Services indexes. “We believe there is a general industry movement towards ETFs,” said Andy O’Rourke, marketing director at Newton, Mass.-based Direxion. “With the leveraged index fund, you get the price at the end of the day. ETFs are trading intraday and are trading like stocks.” The funds began trading yesterday on the NYSE Arca. Direxion Shares is managed by Rafferty Asset Management LLC of Garden City, N.Y. The firm filed for 34 leveraged ETFs in July.