Do you think travel and vacations are primed to rebound? I mean, really primed to rebound to the point that you’re willing to double your bet?
If so, then the new Direxion Daily Travel & Vacation Bull 2X Shares (OOTO) exchange-traded fund might scratch that itch. The fund tracks the BlueStar Travel and Vacation Index containing companies with operations catering to travel/vacation-type activities ranging from hotels and commercial airlines to cruises and theme parks.
As part of its dual 2x product launch yesterday, Direxion has also introduced the Direxion Daily 5G Communications Bull 2X Shares (TENG). This fund tracks the BlueStar 5G Communications Index composed of companies with products and services tied to 5G networking and communication technologies.
Both funds have a net expense ratio of 1.07%.
Funds with 2x leveraged bullish exposure are designed to provide 200% of the return of an underlying index for a single day. (On the flip side, funds with 2x leveraged bearish exposure are built to provide 200% of the opposite, or inverse return of an underlying index for a single day.)
Leveraged funds employ derivatives to get their required exposure levels, which ratchets up the volatility because market fluctuations require daily rebalancing that can impact a leveraged fund’s performance for periods longer than a day. In short, leveraged funds are intended as short-term holdings, and essentially are trading vehicles for investors with a quick trigger finger. When the bet goes in the right direction, it’s a nice payoff. When the bet goes south, it’s a painful experience.