Direxion Shares, the No. 2 exchange-traded fund sponsor by
assets of leveraged and inverse strategies, is closing three
that have failed to attract significant assets, bringing a record
year of ETF closures to the brink of crossing the 100-fund
The three funds that the Newton, Mass.-based company is shutting
and their assets are as follows:
- Direxion Large Cap Insider Sentiment Shares (NYSEArca:INSD),
- Direxion S&P 1500 RC Volatility Response Shares
(NYSEArca:VSPR), $4.25 million
- Direxion S&P Latin America 40 RC Volatility Response
Shares (NYSEArca:VLAT), $3.83 million
While total U.S.-listed ETF assets have been reaching record
levels this year-most recently just shy of $1.338 trillion on Dec.
12-closures have been accelerating while fund launches have been
Industry sources say the industry is starting to mature and,
moreover, the risk on/risk off flavor of markets since the 2008
crash has made fund sponsors more cautious in general about
launching new ideas or defending ones that aren't catching on very
The closures will bring to 95 the number of funds that are
shutting so far this year. In 2011, 30 funds shut down, compared
with 49 in 2010, 56 in 2009, 59 in 2008 and none in 2007,
according to data compiled by IndexUniverse.
An official at Direxion said the company is paring down its
presence in both the "insider sentiment" and "volatility
response" slivers of the investment universe to just two funds.
Those two ETFs and their assets are:
- Direxion All Cap Insider Sentiment Shares (NYSEArca:KNOW),
- Direxion S&P 500 RC Volatility Response Shares
(NYSEArca:VSPY), $4.29 million
Details Of The Direxion Closures
The three funds being shut down were to stop trading Jan. 18 and
be liquidated on Jan. 25, 2013, Direxion said in a press
The funds will close when all distributions are complete, the
company said. The company said investors with questions about the
shuttering should contact Direxion at 800-851-0511.
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