Alternative Investments: New ETFs From Direxion Provide Leveraged Exposure To TIPS

April 7, 2022 | Alternative Investments, News

The ETFS track the Solactive TIPS ETF Index. (TIPS=Treasury Inflation-Protected Securities)

Direxion has launched ETFs that provide 2X leveraged bullish or bearish exposure to a TIPS index. Tips are securities issued by the U.S. Treasury that are designed to provide inflation protection to investors. These are income-generating instruments whose interest and principal payments are adjusted for inflation. Inflation is a sustained increase in prices that erodes the purchasing power of money. (CISION PRNewswire)

“Following decades when inflation was all but non-existent, the prices of everything from cars to computers have jumped in recent months,” said David Mazza, Managing Director, Head of Product at Direxion. “TIPL and TIPD allow traders to take amplified bullish or bearish positions on the US TIPS market.”

Direxion Daily TIPS Bull 2X Shares (TIPL) and Direxion Daily TIPS Bear 2X Shares (TIPD)

The new leveraged ETFs from Direxion track the Solactive TIPS ETF Index (SOLTIPET). This index has 100% of holdings in iShares TIPS Bond ETF.

They seek a return that is (+)200% or (-)200% of the return of their benchmark index for a single day. The funds should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day.

The features of the ETFs are summarized here:

These ETFs demand some sophistication in the investors, and an understanding of the risks associated with seeking daily leveraged and inverse investment results. Further the investors should intend to actively monitor and manage their investments.

Related Story: Twitter Co-Founder Jack Dorsey Warns Of Hyperinflation

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