Earlier this month, Direxion announced plans to close and liquidate five of its inverse 3x ETFs. This Tuesday (9/23/14) will be the last day of listed trading, and liquidation will take place September 29. We advise shareholders to dispose of their holdings prior to the delisting because remaining shareholders will bear the cost of closing the funds according to Direxion.
The affected funds are:
- Direxion Daily Brazil Bear 3x Shares (BRZS)
- Direxion Daily FTSE Europe Bear 3x Shares (EURZ)
- Direxion Daily Japan Bear 3x Shares (JPNS)
- Direxion Daily South Korea Bear 3x Shares (KORZ)
- Direxion Daily Natural Gas Related Bear 3x Shares (GASX)
All five ETFs have “Bull 3x” counterparts that will remain open. It’s not clear whether this is an indication of trader preference for long vehicles or just a side effect of a multi-year bull market. The four international funds are on ETF Deathwatch, while the natural gas fund kept itself off the list due to its high trading frequency.
The five ETFs had combined assets of less than $17 million, representing only 0.2% of the firm’s $8.4 billion in assets under management. These products bring the total number of Direxion ETF closures to 20.
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.