Direxion, one of the largest issuers of inverse and leveraged exchange traded funds, added to its already substantial lineup of geared sector funds Thursday with the debuts of four ETFs representing the consumer discretionary and staples sectors.
All four of the new ETFs are triple-leveraged.
What Happened
Direxion is bringing some spice to the normally defensive low beta consumer staples sector with the Direxion Daily Consumer Staples Bull 3X Shares NEED and the Direxion Daily Consumer Staples Bear 3X Shares LACK.
The bullish NEED is designed to deliver triple the daily returns of the Consumer Staples Select Sector Index (IXRTR) while the bearish LACK looks to deliver triple the daily inverse returns of that index.
That index “includes the following industries: food and staples retailing; household products; food products; beverages; tobacco; and personal products,” according to Direxion.
Major components in the Consumer Staples Select Sector Index include Dow components Coca-Cola Co. KO, Procter & Gamble PG and Walmart Inc. WMT.
Why It's Important
On the consumer cyclical front, Direxion introduced the Direxion Daily Consumer Discretionary Bull 3X Shares WANT and the Direxion Daily Consumer Discretionary Bear 3X Shares PASS.
The bullish WANT aims to deliver triple the daily returns of the Consumer Discretionary Select Sector Index (IXYTR) while the bearish PASS looks to mirror triple the daily inverse performance of that benchmark.
That index “includes the following industries: media; retail (specialty, multiline, internet & catalog); hotels, restaurants & leisure; textiles, apparel & luxury goods; household durables; automobiles; automobile components; distributors; leisure equipment & products; and diversified consumer services,” according to Direxion.
What's Next
As far as the new leveraged consumer discretionary ETFs go, one stock will figure prominently in charting those new funds' performance: Amazon.com Inc. AMZN. Shares of the largest e-commerce company account for nearly 23 percent of Consumer Discretionary Select Sector Index's weight, or more than double the weight assigned to the benchmark's second-largest components.
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