NEW YORK, Jan. 23, 2014 /PRNewswire/ -- Direxion, a leader in alternative investment solutions, has expanded its lineup of long-term buy-and-hold strategies by introducing the Direxion Zacks MLP High Income Shares (ZMLP), an exchange-traded fund (ETF) seeking to generate investment results based on the Zacks MLP Index's price and yield performance.
Zacks Index Services compiles and manages the index, which is composed of approximately 25 master limited partnerships (MLPs) listed on North American stock exchanges. The index's holdings are selected using a quantitative, rules-based methodology developed by Zacks to eliminate MLPs with insufficient share prices, market capitalizations and liquidity. All companies in the index are equally weighted so that each holding constitutes 4 percent of the ETF's portfolio, which is rebalanced on a quarterly basis.
"At a time when investors are increasingly turning to MLPs for attractive income, we are offering investors long-term and cost-efficient access to this asset class," said Eric Falkeis, President of Direxion. "Zacks' proprietary security selection process is the cornerstone of its reputation for reliable financial analysis, and its methodology for identifying the most stable and liquid MLPs can benefit investors in our new ETF."
MLPs may provide investors with additional diversification because they have historically had a low correlation to stocks and bonds. Furthermore, ETFs that invest more than 25 percent of their portfolios in MLPs are structured as C-Corporations, and therefore do not require investors to submit K-1 tax forms in states where MLPs in the portfolios operate.
"Income-oriented investors have found MLPs to be one of the few steady sources of healthy dividends during this low-yield economic environment," said Mitch Zacks, Senior Portfolio Manager, Zacks Investment Management. "We look forward to working with Direxion to provide a greater number of investors with exposure to MLPs we believe are among the best in their asset class."
For more information about Direxion, please contact James Doyle at 973-850-7308 or firstname.lastname@example.org.
Direxion Funds and Direxion Shares, managed by Rafferty Asset Management, LLC, offer leveraged index funds, ETFs and alternative-class fund products for investment advisors and sophisticated investors who seek to effectively manage risk and return in both bull and bear markets. Founded in 1997, the company has approximately $7.3 billion in assets under management as of 12/31/13. The company's business model is built on continuous product innovation, exceptional customer service and a commitment to building strategic relationships with distribution partners. For more information, please visit www.direxionfunds.com.
Zacks Index Services, a division of Zacks Investment Management, creates and manages quantitative investment models that are used in financial products available to investors worldwide. Zacks Index Services manages the underlying indices behind Exchange Traded Funds (ETFs), and also is the sub-advisor on several unit investment trust and structured note strategies.
Zacks Investment Management, a wealth management boutique, is a leading expert on earnings and using earnings estimates in the investment process. ZIM is a wholly owned subsidiary of the parent company, Zacks Investment Research, one of the largest providers of independent research in the U.S.
There is no guarantee that the funds will achieve their objectives.
For more information on all Direxion Shares daily leveraged ETFs, go to www.direxionfunds.com, or call us at 866.476.7523.
The ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investments. Due to the daily nature of the leverage employed, there is no guarantee of amplified long-term returns. Past performance is not indicative of future results.
An investor should consider the investment objectives, risks, charges, and expenses of Direxion Shares carefully before investing. The prospectus and summary prospectus contains this and other information about Direxion Shares. Download a prospectus and summary prospectus at www.direxionfunds.com. The prospectus and summary prospectus should be read carefully before investing.
An investment in the Fund involves risk, including the possible loss of principal. The Funds is non-diversified and include concentration risk that results from the Fund's investments in a particular industry, sector or geography which can increase volatility.
The Fund's investments are concentrated in the energy sector with an emphasis on securities issued by MLPs, which may increase price fluctuation. The value of commodity-linked investments such as the MLPs in which the Fund invests are subject to risks specific to the industry they serve, such as fluctuations in commodity prices, reduced volumes of available natural gas or other energy commodities, slowdowns in new construction and acquisitions, a sustained reduced demand for crude oil, natural gas and refined petroleum products, depletion of the natural gas reserves or other commodities, changes in the macroeconomic or regulatory environment, environmental hazards, rising interest rates and threats of attack by terrorists on energy assets, each of which could affect the Fund's profitability. MLPs are subject to significant regulation and may be adversely affected by changes in the regulatory environment including the risk that an MLP could lose its tax status as a partnership. If an MLP were to be obligated to pay federal income tax on its income at the corporate tax rate, the amount of cash available for distribution would be reduced and such distributions received by the Fund would be taxed under federal income tax laws applicable to corporate dividends received (as dividend income, return of capital, or capital gain). In addition, investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Such companies may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement or difficulty in buying or selling. Additional management fees and other expenses are associated with investing in MLP funds. The Fund is subject to certain MLP tax risks and risks associated with accounting for its deferred tax liability which could materially reduce the net asset value. An investment in the Fund does not offer the tax benefits of a direct investment in an MLP.