This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Triple Bull Real Estate ETF: Beware

Direxion's Daily Real Estate Bull 3X (DRN) was one of the fastest-growing ETFs in September, but don't take that news as a sign of recovery in real estate.

DRN, part of the triple leveraged line from Direxion, had inflows of $69 million during September, finishing with assets under management of $125 million on Sept. 30.

Both DRN and triple bear pair Direxion Daily Real Estate Bear 3x (DRV) have seen solid net cash flows in 2009, according to National Stock Exchange data of $234 million and $38 million, respectively.

A quick look at the numbers, however, puts all of this action into perspective. DRN's notional trading volume nearly doubled from $588 million in August to $1.03 billion in September. Still, at the end of the day, on Sept. 30, only $125 million remained.

These statistics are important when assessing recent concerns about the trading of leveraged products. Back in June, FINRA warned investors that leveraged products were designed for daily trading objectives and not suited for buy-and-hold investors. Brokerage firms like Ameriprise (AMP - Get Report) and UBS (UBS) heeded the warning and stopped marketing the leveraged ETFs to clients.

The latest data, however, suggests that funds like DRN are mostly being used in their intended role: as daily trading vehicles. Traders are in and out of funds like DRN, Direxion Daily Financial Bull 3X (FAS) and Direxion Daily Financial Bear (FAZ) faster than most investors can blink.

So has all the hysteria over leveraged funds been for naught? Education has been good for ETF investors, who are an increasingly diverse fold. Disclosure on Web sites and advertisements should serve to remind people that these products are aimed at professionals and sophisticated traitors.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FAZ $39.58 -0.08%
DRV $21.19 -1.10%
FAS $31.46 -0.03%
DRN $72.03 1.20%
AMP $113.09 0.44%


Chart of I:DJI
DOW 17,844.59 +32.40 0.18%
S&P 500 2,090.87 +1.73 0.08%
NASDAQ 5,119.1980 +16.39 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs