If you think the consumer stapes and utilities sectors are in for a rough time, then Direxion has a couple of exchange-traded funds for you.
On Thursday, the company launched the Direxion Daily Consumer Staples Bear 1X Shares (SPLZ) fund that seeks to trade 100 percent of the inverse of the performance of the Consumer Staples Select Sector Index, along with the Direxion Daily Utilities Bear 1X Shares (UTLZ) which employs a similar 100 percent inverse, or opposite trade on the performance of the Utilities Select Sector Index.
Direxion managing director Paul Brigandi says the Federal Reserve’s stated intent to raise interest rates a few times this year due to a stronger economy provides an ideal backdrop for launching the SPLZ and UTLZ funds. “The launch of SPLZ and UTLZ is timely, as they both provide inverse exposure to two sectors having historically high sensitivity to rising rates,” he said in a press release.
Inverse and leveraged ETFs, which are Direxion’s forte, are built to be used as hedging tools against market downturns or to make tactical calls regarding either bullish and bearish scenarios. They’re not meant to be buy-and-hold products.
Direxion operates 78 leveraged and inverse ETFs ranging from 1x bear funds to 3x bull and 3x bear funds. It also has four strategic-beta ETFs. It has assets under management of roughly $11.2 billion.