Direxion announced this week that it has launched three new ETFs designed to help create long-term growth for investors.
Focused on strategic returns, the new funds include the Direxion MSCI USA ESG – Leaders vs. Laggards ETF (Ticker: ESNG), the Direxion Flight to Safety Strategy ETF (Ticker: FLYT), and the Direxion S&P 500® High Minus Low Quality ETF (Ticker: QMJ). While the ETFs each have a specific focus, the overall themes for the new offerings are long-term returns along with a focus on quality and sustainability.
Key Takeaways
- Three new ETFs from Direxion aim to provide long-term growth for investors.
- The ESNG ETF is the first ETF to offer exposure to ESG leaders while simultaneously shifting the focus away from companies that rank poorly for MSCI’s ESG metrics.
- The new ETFs are part of a series of new investing strategies planned for Direxion.
Putting the Focus on Sustainability
Sustainable investing has become increasingly popular in recent years with the Forum for Sustainable and Responsible Investment (USSIF) reporting that sustainable, responsible and impact investing grew by more than 38% from 2016 to 2018. With a strong focus on ESG factors, the ESNG ETF speaks directly to this trend and aims to offer increased exposure to companies that are leading the pack in environmental, social, and corporate governance metrics.
Relying on a 150/50 structure, ESNG offers increased exposure to the 100 highest scoring ESG companies while taking a short position on the 100 lowest scoring ones. By taking into account both ESG leaders and those that are falling short of meeting required standards, Direxion hopes that ESNG will provide investors with exposure to better performing and more sustainable investments.
“We’re on a mission to accelerate the number and variety of strategies we offer that can benefit long-term investors,” said Dave Mazza, managing director at Direxion, in an announcement released on February 5, 2018. He also explained that Direxion hopes this will help diversify investing options for its clients. “These strategies allow a broader audience to benefit from our expertise in delivering smart, precise exposure to distinct and strategically focused investment opportunities.”
The Bottom Line
With sustainable investing and ETFs both on the rise, these types of funds are likely to become more common over the next few years. For now, the ESNG ETF is providing investors with new avenues for socially responsible growth.
