Direxion Daily Energy Bull 2X Shares (ERX)

Overview

The described entity is a fund that primarily focuses on the energy sector, including industries such as oil, gas and consumable fuels, along with energy equipment and services. It is linked to an index provided by S&P Dow Jones Indices, which comprehensively encompasses domestic companies operating within these sectors. This fund is distinctive in its investment strategy, as it commits at least 80% of its net assets to financial instruments like swap agreements, securities of the index, and ETFs that track the index. A notable aspect of this fund is its goal to provide 2X daily leveraged exposure to the index, aligning with the fund’s investment objective. It's important to highlight that this fund operates with a non-diversified investment approach.

Products and Services

The fund offers a specialized set of financial products and services designed to cater to investors interested in the energy sector, with a focus on providing leveraged exposure. The offerings include:

• Swap Agreements: These are derivative contracts through which two parties exchange financial instruments or cash flows based on a specified index or asset. For this fund, swap agreements are employed as a means to achieve the desired leveraged exposure to the energy sector index.
• Securities of the Index: The fund invests in securities that are constituents of the specific S&P Dow Jones Indices related to the energy sector. This direct investment approach in the index securities is fundamental to tracking the index's performance closely.
• ETFs that Track the Index: Exchange-Traded Funds (ETFs) that mirror the performance of the energy sector index are another investment vehicle utilized by the fund. These ETFs provide an efficient way to gain leveraged exposure to the index, benefiting from their liquidity and flexibility in trading.

Together, these financial instruments and strategies are utilized to fulfill the fund's objective of providing 2X daily leveraged exposure to the energy sector index, catering to investors seeking to potentially amplify their returns in this specific market segment.