Direxion, a liquid alternative investment solutions that is managed by Rafferty Asset Management, has changed Direxion Currency Trends Strategy Fund’s benchmark from the Alpha Financial Technologies Financial Trends Indicator to the pure currency index the FX Trends Indicator (FXTI).
The Fund will replicate investment results comparable to the performance of the FXTI. The Fund’s index-based investment strategy is a quantitative rules-based long/short trend-following approach to currency investing.
“Changing the benchmark provides increased access to a broad basket of global currencies in one investment vehicle,” says Edward Egilinsky, managing director and head of Alternative Investments at Direxion. “Currencies should be recognized as a distinct alternative asset class because of their independent return stream and low correlations to both traditional asset classes and other types of alternatives investments.”
These attributes can contribute to reducing portfolio volatility when used as a complement to stocks and bonds.
By changing its benchmark to the FXTI, the Fund has aligned itself with the only known long/short currency index in the retail marketplace, and one which provides verifiable and repeatable data going back 10 years.
The Fund provides exposure to 11 global currencies that includes those of developed markets, emerging markets and commodity-based countries that may independently profit from a rise or fall in the US dollar.
The Fund’s strategy is rooted in the benefits that currency investments provide investors. Currency markets are highly liquid, very volatile to those with fixed income and their investment returns have low correlation to more traditional equity and fixed income markets.
The Fund, formerly known as the Financial Trends Strategy Fund, changed its name and index effective September 1, 2011. The change illustrates Direxion‘s commitment to the alternatives space, its desire to refine existing strategies when appropriate and to broaden their suite of alternative products.
The Fund is managed to track the Alpha Financial FX Trends Index. The FXTI is an index that reflects price movements across eleven foreign currency components. The Fund invests primarily in derivatives, including currency and financial futures contracts, options and swap contracts, but may also invest directly in currencies, equity securities and fixed income securities, and in exchange-traded funds and other investment companies.
It will attempt to achieve the same weightings among the Euro, Japanese Yen, Swiss Franc, Brazilian Real, British Pound, Canadian Dollar, Mexican Peso, Australian Dollar, New Zealand Dollar, Norwegian Krone and South African Rand as the FXTI, but may not, at all times, invest in the same underlying securities or derivatives.
Direxion was founded in 1997 and has approximately $7.5 billion in assets under management as of September 30, 2011. Its business model is built on continuous product innovation, exceptional customer service and a commitment to building strategic relationships with distribution partners.