Despite the recent scrutiny of leveraged ETFs, Direxion continues to grow its triple fund line.

On July 16, Direxion launched the Daily Real Estate Bull 3x Shares ( DRN) and its inverse, the Daily Real Estate Bear 3x Shares ( DRV). Both funds are designed to give investors returns that are either plus or minus 3 times exposure to the MSCI U.S. REIT Index ( RMZ), updated on a daily basis.

The sales practices of leveraged ETFs have come under fire in June and July. Beginning with a notice from FINRA in June, the regulatory scope has been set squarely on leveraged funds. The original notice begins:

"Exchange-traded funds (ETFs) that offer leverage or that are designed to perform inversely to the index or benchmark they track--or both--are growing in number and popularity. While such products may be useful in some sophisticated trading strategies, they are highly complex financial instruments that are typically designed to achieve their stated objectives on a daily basis.

"Due to the effects of compounding, their performance over longer periods of time can differ significantly from their stated daily objective. Therefore, inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets."

Not surprisingly, leveraged fund issuers like Direxion and ProShares have already begun adopting this language into their websites and ad campaigns. More recently, the Attorney General of Massachusetts began looking into the sales products of leveraged funds as well. Read more about this in this article.

Despite the increased disclosure and regulation, however, the high trading volume of many leveraged funds continues to prompt issuers to launch new ETFs. The latest leveraged real estate offerings from Direxion show a striking similarity to a pair of real estate ETFs launched by ProShares in mid 2007.

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