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New Direxion ETFs Target Gold Miners, European Financials

July 27, 2016 2:12 pm
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In what has been a rough year for European financial services stocks and a banner year for gold miners shares, some traders might be looking to make contrarian bets. Direxion, the second-largest issuer of inverse and leveraged exchange-traded funds, is there to oblige with two new ETFs targeting the aforementioned market segments.

Beautiful EUFL

The Direxion Daily European Financials Bull 2X Shares (NYSE: EUFL) will attempt to deliver twice the daily returns of the MSCI Daily TR Europe Net Financials USD Index. That index features exposure to U.K. and Swiss banks as well as Eurozone exposure via, France, German and Italy, among others.

Related Link: Gold Consolidation Continues Ahead Of Fed Meeting

Italy is widely seen as trouble spot among European bank stocks. As non-performing loans (NPLs) creep higher, investors mulling a stake in Italy ETFs or other Italy vehicles are pondering when reforms aimed at righting the banking sector there will be implemented and how long it will take those reforms to have a noticeable, positive impact.

Italy's most recent NPL plan is not reminiscent of TARP during the financial crisis in that the country isn't looking to sell bad loans. However, complexities surrounding Italy's efforts to deal with its NPL crisis could limit participation by some of the banks residing in EUFL's index.

Getting Down With DUST, JDST And MELT

For traders looking to make bearish bets on gold miners without the leveraged associated with ETFs such as the Direxion Daily Gold Miners 3X Bear Shares (Direxion Shares Exchange Traded Fund Trust (NYSE: DUST)) and the Direxion Daily Junior Gold Miners 3X Bear Shares (Direxion Shares Exchange Traded Fund Trust (NYSE: JDST)), Direxion has a solution in the form of the non-leveraged Direxion Daily Gold Miners Index Bear 1x Shares (NYSE: MELT).

MELT attempts to deliver the daily inverse performance of the NYSE Gold Miners TR Index.

MELT is the eleventh member of Direxion's inverse-though-not-leveraged ETFs. The issuers other ETFs in that category offer bearish exposure to bonds, Chinese stocks and the S&P 500, among other asset classes.

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