This article was originally published on ETFTrends.com.
Lightly leveraged solutions – that’s the methodology behind Direxion’s six new ETFs that launched today that offer access to manageable levels of added daily exposure to magnify returns, in a cost-effective, transparent, liquid structure.
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The new family of ETFs, called Portfolio+ ETFs, each provide 25% added daily exposure to popular broad-based indexes targeted by advisors.
The lightly leveraged solutions can be applied to common asset allocation strategies to seek greater upside potential over time.
In a call with ETF Trends on Thursday morning, Direxion managing director Andy O'Rourke said the new products allow advisors to give "a little extra strength to existing portfolios."
"These products do well in trending markets," O'Rourke told ETF Trends. "They offer great upside potential. If you believe markets will generally rise over time -- and agree that times of high volatility are infrequent and short lived -- you can believe that these products will work for you."
He added that when you do the math, the impact and frequency of positive compounding is much greater than that of negative compounding.
"If investors believe that a portfolio offering 100% exposure to the markets is good, it stands to reason that a portfolio with 125% exposure can be better, even after full consideration of the potential risks," he said.
"With the growing acceptance of passive index investing, it is becoming increasing difficult for advisors to show value if everyone is buying the same passive index funds. The added horsepower available within the Portfolio+ ETFs can help advisors rise about the competition."
Two of the funds already have a three-year track record, as they were previously part of the Direxion ETF family. They now have new names and ticker symbols:
- Portfolio+ S&P® Mid Cap ETF (PPMC)
- Portfolio+ Developed Markets ETF (PPDM)
- Portfolio+ Emerging Markets ETF (PPEM)
- Portfolio+ Total Bond Market ETF (PPTB)
- Portfolio+ S&P 500® ETF (PPLC) - formerly Direxion Daily S&P 500® Bull 1.25X Shares
- Portfolio+ S&P® Small Cap ETF (PPSC) - formerly Direxion Daily Small Cap Bull 1.25X Shares
Direxion managing director Sylvia Jablonski said over the past decade or so, increased correlation, the inability to outperform passive indexing, and fee compression all put pressure on advisors to prove their worth.
"Traditional diversified asset allocation has worked well for decades,” Jablonski said. “These new ETFs are a way to get just a little more out of those allocations, and maybe set yourself apart from your competitors."
For more information on these new ETFs, visit portfolioplustetfs.com.
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