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ProShares 3x

ProShares Joining 3x Leverage ETF Party

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It was really just a matter of time wasn’t it?  With the smashing success Direxion has seen with its 3x leveraged ETFs it’s no surprise that ProShares wants to join the party and has filed to add 3x leverage on up to 37 of its ETFs.  It certainly wants a slice of Direxion’s 3x leveraged pie which as of recently was roughly 3.4 billion in assets across 16 leveraged ETFs.  The amount of trading volume on these leveraged ETFs is truly staggering with the popularity of them leading to all kinds of “warning” articles about the dangers.  Quite frankly I’m tired of it.  Yes, they are dangerous if used improperly just like any other kind of investment vehicle.  Know the risks, definitely know some technical analysis and understand they are designed for the short term.  Enough said.

This is a list of potential 3x leveraged ETF’s ProShares may launch and here is the SEC filing.

1.  DJ Wilshire Total Market Index
2.  Russell 1000 Index
3.  Russell 3000 Index
4.  Russell 3000 Value Index
5.  Russell 3000 Growth Index
6.  MSCI EAFE Index
7.  MSCI EAFE Value Index
8.  MSCI EAFE Growth Index
9.  MSCI Emerging Markets Index
10.  MSCI Japan Index
11.  MSCI Pacific Free ex-Japan Index
12.  MSCI Australia Index
13.  MSCI Malaysia Index
14.  MSCI Singapore Index
15.  MSCI Europe Index
16.  S&P Europe 350 Index
17.  Russell/Nomura Prime Japan Index
18.  Nikkei 255 Stock Average
19.  FTSE/Xinhua China 25 Index
20.  BONY Emerging Markets 50 ADR Index
21.  BONY Developed Markets 100 ADR Index
22.  BONY Japan Index
23.  BONY China Index
24.  Lehman US Aggregate Index
25.  Lehman 7 – 10 Year Treasury Index
26.  Lehman 20+ Year Treasury Index
27.  iBoxx Liquid $ Investment Grade Index
28.  iBoxx Liquid $ High Yield Index
29.  NASDAQ Biotechnology Equal-Weighted Index
30.  NASDAQ Clean Edge U.S. Liquid Series Index
31.  NASDAQ-100 Equal Weighted Index
32.  MSCI Brazil Index
33.  MSCI Taiwan Index
34.  MSCI South Korea Index
35.  MSCI BRIC Index
36.  MSCI Latin America Index

Direxion

Direxion Shares Launches 3x Leveraged Treasury ETFs

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Direxion Funds is announcing the addition of four more 3x leveraged ETFs which will focus on Treasuries.  The bull and bear 3x Treasury ETFs will seek to return 300% the daily performance (or in the inverse for the bear ETFs) of the 10 and 30 Yr Treasury Indexes.  Just like all the Direxion ETF funds I’d expect these to be very popular with short term traders for hedging and leveraged day trading.

“We will continue to further expand and enhance our ETF lineup with such unique products,” said Direxion President Dan O’Neill. “This strategic move to offer leveraged Treasury ETFs is another example of our commitment to developing tools designed to help meet the demand of the tactically minded investor attempting to mitigate portfolio risk and opportunity.”

Here are the ETFs being offered:

– 10 yr Treasury Bull 3x (TYD) 300% leverage
– 10 yr Treasury Bear 3x (TYO) – 300% leverage
– 30 yr Treasury Bull 3x (TMF) 300% leverage
– 30 yr Treasury Bear 3x (TMV) -300% leverage

It should also be noted that Direxion will immediately add the word “Daily” to all its ETF names to reflect the fact the funds seek daily investment goals and should only be used for very short term trading.  There has been much discussion about erosion in performance over the longer haul in leveraged ETFs, so this is probably in response to that.