Three Non-Leveraged Inverse Bond ETFs From Direxion

March 28, 2011 by  
Filed under Commentary, ETF IPOs (New ETFs)

Direxion, the firm that popularized 3x leveraged funds, launched its first inverse ETFs that do not employ leverage on March 23, 2011.  The three new ETFs provide -100% daily exposure to various bond market segments: Direxion Daily Total Bond Market Bear 1x Shares (SAGG), Direxion Daily 7-10 Year Treasury Bear 1x Shares (TYNS), and Direxion Daily 20+ Year Treasury Bear 1x Shares (TYBS).

Direxion Daily Total Bond Market Bear 1x Shares (SAGG) seeks to capture 100% of the daily inverse price performance of the Barclay’s Capital U.S. Aggregate Bond Index.  The underlying index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, and fixed-rate taxable bond market; including Treasuries, government-related securities, corporate securities, Mortgage Backed Securities, Asset Backed Securities, and Commercial Mortgage Backed Securities.

SAGG has an expense ratio capped at 0.65% and holds swaps tied to the inverse performance of the iShares Barclays Aggregate Bond ETF (AGG).  Additional information is in the SAGG overview and SAGG fact sheet (pdf).

Direxion Daily 7-10 Year Treasury Bear 1x Shares (TYNS) seeks to capture 100% of the daily inverse of the price performance of the NYSE 7-10 Year Treasury Bond Index.  The underlying index aims to track the total returns of the intermediate 7 to 10 year maturity range of the U.S. Treasury bond market.

TYNS has an expense ratio capped at 0.65% and holds swaps tied to the inverse performance of the iShares Barclays 7-10 Year Treasury Bond ETF (IEF).  Additional information is in the TYNS overview and TYNS fact sheet (pdf).

Direxion Daily 20+ Year Treasury Bear 1x Shares (TYBS) seeks to capture 100% of the daily inverse of the price performance of the NYSE 20 Year Plus Treasury Bond Index.  The underlying index aims to track the total returns of the intermediate 20 plus year maturity range of the U.S. Treasury bond market.

TYBS has an expense ratio capped at 0.65% and holds swaps tied to the inverse performance of iShares Barclays 20+ Year Treasury Bond ETF (TLT).  Additional information is in the TYBS overview and TYBS fact sheet (pdf).

The prospectus (pdf) is labeled “1X Bear Funds” and covers eleven funds in all.  In addition to the three bond ETFs just launched, Direxion has two more bond, four domestic equity, and two international equity ETFs waiting in the wings.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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