Direxion has expanded its lineup of "buy and hold" alternative strategies with the launch of the Direxion Indexed Managed Futures Strategy Fund. The fund is designed to give investors a liquid, transparent, and cost-efficient way to invest in managed futures.
The fund seeks to replicate the Auspice Managed Futures ER Index. This index is a completely quantitative, rules-based managed futures index made up of 21 futures markets (containing both physical commodities and financials), whose methodology is repeatable and verifiable.
The index has a number of attributes that differentiate it from other managed futures index strategies in the retail marketplace including; the ability to adjust positions intra-month, a monthly rebalance process that assesses volatility levels as a means to control risk, and a focus on shorter term trends to be more responsive. It also incorporates a smart contract roll process that takes into account contango and backwardation.
Managed futures are an alternative investment that can benefit from price trends regardless of direction in the futures markets. They are one of the longest-standing alternative investment strategies utilised by investment firms. The asset class has a long term performance history that has shown the ability to generate positive returns during equity bear markets. Historically, Managed futures have also provided low correlation to stocks and bonds, as well as to other alternative investments. The managed futures market continues to see inflows of investment capital, having experienced a nearly 20 percent growth in assets in 2011.
"We are pleased to offer investors an innovative alternative investment strategy which further broadens our suite of "buy and hold" alternative products," says Ed Egilinsky (pictured), Managing Director, Head of Alternative Investments at Direxion. "There are very few investable managed futures indices currently available to the retail investor. We feel that this is a differentiated, cost efficient way for investors to get exposure to the managed futures asset class without the additional layer of underlying managers and the fees associated with them. This next generation version of managed futures indexing for the retail investor provides our shareholders with another opportunity to manage risk while pursuing returns in the current market."
