Direxion is to transition two of its leveraged exchange-traded funds to the FTSE China 25 Index.
The Direxion Daily FTSE China Bull 3X Shares (YINN) and Direxion Daily FTSE China Bear 3X Shares (YANG) will begin following their new index on 12 December, making them the first pair of 3X leveraged and inverse ETFs in the US to track this composite.
The FTSE China 25 is compiled by global index provider FTSE, and consists of the 25 largest Chinese companies listed on the Stock Exchange of Hong Kong. The index ranks stocks by full market capitalisation and weights them by float market capitalisation; each company is capped at 10 percent of the entire index. The FTSE China 25 is a subset of the FTSE China Index Series. In common with all FTSE indices, the FTSE China 25 is managed according to a publicly available set of rules and is overseen by an independent committee of seasoned market practitioners.
“As investor interest in the Asian equity markets – and Chinese stocks in particular – continues to grow, we are excited to offer investors exposure to some of the most prominent Chinese companies,” says Eric Falkeis, president of Direxion. “By offering both bull and bear funds that track this reliable benchmark, investors can seek to reap healthy returns no matter what their outlook on Chinese equities.”
The Direxion Daily FTSE China Bull 3X Shares seeks to generate daily investment results of 300 per cent of the performance of the FTSE China 25, before fees and expenses. Conversely, the Direxion Daily FTSE China Bear 3X Shares seeks to obtain daily investment results of 300 per cent of the opposite of the performance of the FTSE China 25, before fees and expenses.
The funds were launched in December 2009 and are nearing USD100m in combined assets under management, as of 31 October 2013.
“FTSE provides benchmarks for more than 60 percent of assets tracking China-themed, US-listed ETFs, and we’re delighted by Direxion’s adoption of the FTSE China 25 Index,” says Jonathan Horton, president of FTSE North America and head of FTSE’s exchange-traded product service unit. “Our relationship with Direxion reflects the growing global demand for multiple ETF vehicles offering exposure to the largest and most liquid Chinese stocks.”
