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Direxion launches two alternative strategy funds

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Direxion Funds, a provider of exchange traded funds designed for alternative investment strategies, has announced the launch of two funds designed to enable investors to add tactical in

Direxion Funds, a provider of exchange traded funds designed for alternative investment strategies, has announced the launch of two funds designed to enable investors to add tactical investment strategies to their portfolios.

The Direxion Financial Trends Strategy Fund and the Direxion/Wilshire Dynamic Fund are designed to use tactical investment methods to marry a long-term investment outlook with consideration for short- and medium-term market events to guard portfolios against today’s potentially harmful volatile markets.

‘We believe that the markets can often be inefficient and that a long-term strategic asset allocation approach alone does not do enough to sustain real long-term returns,’ says Direxion Funds president Dan O’Neill.

‘For years Direxion has been a premier provider of leveraged and inverse trading tools that allow sophisticated investors to implement their own tactical asset allocation strategies. For those without the resources, know-how or desire to actively manage their investment portfolio, we have launched these two funds, allowing investors to take advantage of market opportunities and potentially profit in markets that are moving upwards, downwards or sideways.’

The Direxion Financial Trends Strategy Fund tracks the Standard and Poor’s Financial Trends Indicator. The long/short fund uses financial and currency futures to provide exposure to eight global financial and currency sectors, the Canadian dollar, Australian dollar, Swiss franc, sterling, Japanese yen, euro, US Treasury notes and US Treasury bonds.

The S&P FTI positions each sector long or short, based on its price behaviour relative to its average price over a recent period, or seven-month ‘moving average,’ capitalising on the rising and declining trends in the currency and fixed income markets. The S&P FTI sectors are rebalanced on a monthly basis.

The Direxion/Wilshire Dynamic Fund’s strategy is based on a traditional strategic asset allocation model that employs a tactical overlay, meaning it is based on a traditional 60/40 strategic asset allocation model, but each of the 17 asset classes within is then over- or under-weighted based on investment decisions made by the fund’s sub-adviser.

The fund is sub-advised by Wilshire Associated, founded in 1972, which offers investment solutions, consulting services and technology solutions, and provides investment consulting and services to fund sponsors and financial intermediaries.

Last June Direxion launched the Direxion Commodity Trends Strategy Fund, which is benchmarked to the S&P CTI, and earlier last year the fund family aligned with Wilshire to offer the Direxion/Wilshire Dynamic Asset Allocation Models.

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