Direxion on Wednesday debuted a suite of what it calls “Relative Weight” exchange-traded funds that track indexes from FTSE Russell and MSCI and pair them to capture common macro thematic views. This strategy enables investors to participate in both sides of an expressed view by taking long and short positions on a particular theme.
For example, the Direxion FTSE Russell US Over International ETF (RWUI) has a 150 percent long exposure to the Russell 1000 Index and a 50 percent short exposure to the FTSE All-World ex US Index. This setup favors a domestic over international investment viewpoint.
Conversely, the Direxion FTSE Russell International Over US ETF (RWIU) has a 150 percent long exposure to the FTSE All-World ex US Index and a 50 percent short exposure to the Russell 1000 Index. This structure expresses an international over domestic investment viewpoint.
In both cases, the underlying indexes will rebalance monthly so that the weight of the long component equals 150 percent and the short component equals 50 percent of the index value.
The following are Direxion’s 10 new ETFs and their index pairs:
• Direxion Russell 1000 Value Over Growth ETF (RWVG)
— Russell 1000 Value/Growth 150/50 Net Spread Index
• Direxion Russell 1000 Growth Over Value ETF (RWGV)
— Russell 1000 Growth/Value 150/50 Net Spread Index
• Direxion Russell Large Over Small Cap ETF (RWLS)
— Russell 1000/Russell 2000 150/50 Net Spread Index
• Direxion Russell Small Over Large Cap ETF (RWSL)
— Russell 2000/Russell 1000 150/50 Net Spread Index
• Direxion MSCI Cyclicals Over Defensives ETF (RWCD)
— MSCI USA Cyclical Sectors – USA Defensive Sectors 150/50 Return Spread Index