Direxion Daily Junior Gold Miners Index Bear 2X Shares (JDST)

Overview

The company operates within the financial sector, specifically focusing on the gold and silver mining industry. It targets domestic and international small- and mid-capitalization companies engaged in mining activities for these precious metals. The company's investment strategy is distinctive as it leverages financial instruments such as swap agreements, futures contracts, or short positions to achieve its investment objective. This objective centers on providing 2X daily inverse (opposite) or short exposure to its underlining index or to Exchange Traded Funds (ETFs) that trace the same index. In its operations, the company maintains a non-diversified investment portfolio, placing a significant portion of its net assets, at least 80%, in the aforementioned financial instruments to meet its investment goals.

Products and Services

• Swap Agreements

As part of its main investment strategy, the company engages in swap agreements. These financial instruments allow the company to exchange the income flows or other asset attributes for the anticipated returns on its investments in the gold and silver mining industry's index. Swap agreements are a pivotal tool in achieving the inverse exposure to the market movements of precious metals mining companies.

• Futures Contracts

Futures contracts are another cornerstone of the company's investment approach. By entering into futures contracts, the company commits to buying or selling the index at a predetermined price at a future date. This method is employed to hedge against market volatility or to profit from the forecasted decline (given its inverse market exposure strategy) in the gold and silver mining industry.

• Short Positions

The firm also strategically establishes short positions against the index or ETFs tracking the index. Short selling involves borrowing shares of the index or ETF and selling them with the expectation of repurchasing them at a lower price. This practice aligns with the company’s objective to profit from the declines in the market values of its targeted investment area.

• ETFs Tracking Exposure

To complement its direct investment strategies, the company invests in ETFs that track the performance of the gold and silver mining industry's index. This diversifies the mechanisms through which the company can achieve 2X daily inverse exposure, allowing it to balance its investment portfolio against market uncertainties and to optimize its returns on investments in this niche sector.