Direxion, a leading provider of exchange-traded funds (ETFs), has unveiled plans to escalate the leverage and risk level of six of its single stock daily leveraged ETFs. This adjustment, effective on or around April 2, 2024, will elevate these ETFs to seek daily leveraged investment results of 200% of the daily performance of their respective underlying securities, a notable increase from the current 150%. The ETFs affected by this change include Direxion Daily AAPL Bull 2X Shares (AAPU), Direxion Daily AMZN Bull 2X Shares (AMZU), Direxion Daily GOOGL Bull 2X Shares (GGLL), Direxion Daily MSFT Bull 2X Shares (MSFU), Direxion Daily NVDA Bull 2X Shares (NVDU), and Direxion Daily TSLA Bull 2X Shares (TSLL), tracking Apple Inc., Amazon.com, Inc., Alphabet Inc. Class A, Microsoft Corporation, NVIDIA Corporation, and Tesla, Inc., respectively.
According to Direxion, this heightened leverage is designed to magnify both the potential for gains and losses in relation to the performance of each ETF's underlying security. The company emphasizes that these products are tailored for investors who possess a thorough understanding of the risks tied to leveraged investments and who actively oversee and manage their positions. More details on the risks and considerations can be found in the Direxion Leveraged and Inverse ETF Education Center.
Founded in 1997 and managing approximately $38.1 billion in assets as of December 31, 2023, Direxion specializes in offering ETF solutions that cater to specific market perspectives and risk exposure management. However, the company cautions that achieving the investment objectives of these Funds is not guaranteed, urging investors to meticulously review the risks, charges, and expenses detailed in the prospectus and summary prospectus before making any investment decisions.
This strategic move by Direxion could significantly impact investors and the broader ETF market, offering enhanced opportunities for those willing to navigate the increased volatility and risk. It underscores the evolving nature of investment products and the importance of investor education in leveraging such financial instruments effectively.
