Alternative Investments/ESG: Direxion Launches 2X Leveraged Clean Energy ETF
A leveraged ETF is suitable for experienced investors who can monitor their investment on a day-to-day basis.
Direxion announced Thursday (July 29, 2021) its launch of the Direxion Daily Global Clean Energy Bull 2x Shares (KLNE), a leveraged ETF that seeks to return 200% of its benchmark index, the S&P Global Clean Energy Index, in a single day. (Direxion)
Direxion Daily Global Clean Energy Bull 2x Shares (KLNE)
The ETF seeks to invest in companies located in the developed markets and which are involved with the global clean energy business.
As of May 31, 2021, the S&P Global Clean Energy Index comprised 81 constituents mainly concentrated in the utilities, industrials, and information technology sectors.
The fund has a gross expense ratio of 1.09% and a net expense ratio of 1.07%. However, the fund advisor has contractually agreed to waive a portion or all of its management fee and/or reimburse the Fund for other expenses through September 1, 2022.
“While the long-term trend toward more sustainable energy sources continues to increase, stocks in this sector are likely to remain volatile as macro drivers impact moves in the short-term,” said David Mazza, Managing Director, Head of Product. “KLNE allows traders to take a bold position in companies exposed to solar, wind, and other renewable energy sources.”
Here’s a cautionary note from Direxion: This leveraged ETF seeks a return that is 200% of the return of its benchmark index for a single day. The fund should not be expected to provide two times the return of the benchmark’s cumulative return for periods greater than a day.
Related Story: Invesco Launches Global Clean Energy ETF In London
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