The team at a 27-year-old, $38.1-billion-AUM (as of December 31, 2023), Gotham asset manager is rolling out two ETFs that focus on the "Magnificent Seven," and the team is preparing to launch a third such ETF.

Yesterday, Edward Egilinsky, managing director and head of sales and alternatives at New York City-based Direxion, unveiled the launch of the Direxion Daily Concentraded Qs Bull 2X Shares (QQQU on NYSE Arca, Inc.) and the Direxion Daily Concentrated Qs Bear 1X Shares (QQQD). The Direxion team also filed to launch a similar ETF, the Direxion Daily Concentrated Qs Bear 2X Shares, which has not yet been released and has no ticker.

QQQD, QQQU appear to be Direxion's first ETFs branded as "concentrated." Both new ETFs, and the planned ETF, are designed in reference to the Indxx Front of the Q Index, which equally weights the seven biggest Nasdaq-listed companies. (Those companies, also known as the "Magnificent 7," include: Apple, Alphabet, Amazon, Meta, Microsoft, NVIDIA, and Tesla.) QQQU is designed to return 200 percent of the daily returns of that index, while QQQD is designed to return 100 percent of the inverse of that index's daily returns, and the planned ETF is designed to return twice QQQD's daily returns.

QQQU and QQQD's inception date was yesterday. QQQU and the third planned ETF have expense ratios of 107 basis points (which bakes in a 2bps fee waiver), while QQQD's expense ratio is 57bps (including a 12bps fee waiver). (The waivers are promised through September 1, 2025.)

The ETFs' index provider is Indxx and the investment advisor is Rafferty Asset Management, LLC (home of Direxion, which offers numerous other leveraged and inverse index ETFs and mutual funds) [profile]. These three ETFs' PM team includes two portfolio managers: Paul Brigandi and Tony Ng.

The Direxion team notes that the Magnificent 7 companies are all "household names." Egilinsky adds that the funds are designed to "capitalize on key market drivers, to include artificial intelligence, cloud computing, and semiconductors."

"These Funds offer traders a unique opportunity to express their short-term conviction on the top seven market cap-weighted companies in the Nasdaq 100," Egilinsky states.

The three concentrated ETFs' other service providers include: Bank of New York Mellon as custodian, fund accountant, index receipt agent, securities lending agent, and transfer agent; Ernst & Young LLP as independent accounting firm; Foreside Fund Services, LLC as distributor; K&L Gates LLP as counsel; and U.S. Bancorp Fund Services, LLC as administrator. 

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