Direxion Announces A Number Of Reverse Splits For Its Leveraged ETFs

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March 1, 2017 10:24am NYSE:JNUG NYSE:NUGT

share splits

ETF issuer Direxion announced it will complete reverse splits for a number of its leveraged funds this spring, including a couple of very popular gold mining ETFs.


In total, eight funds will see reverse splits, effective May 1, 2017. The split ratios vary from a modest 1-for-2 all the way up to a very highly leveraged 1-for-5. Consult the table below for the full list of funds affected, along with their split ratios and new CUSIPs.

Fund Name Ticker Current CUSIP New CUSIP Reverse Split Ratio Approx. decrease in # of outstanding shares
Direxion Daily S&P 500® Bear 1X Shares SPDN 25490K216 25460E869 1 for 2 50%
Direxion Daily Gold Miners Index Bull 3X Shares NUGT 25490K570 25460E844 1 for 4 75%
Direxion Daily Junior Gold Miners Index Bull 3X Shares JNUG 25490K554 25460E851 1 for 4 75%
Direxion Daily Junior Gold Miners Index Bear 3X Shares JDST 25490K141 25460E877 1 for 4 75%
Direxion Daily Semiconductor Bear 3X Shares SOXS 25490K778 25460E836 1 for 5 80%
Direxion Daily Regional Banks Bear 3X Shares WDRW 25459Y124 25460E802 1 for 5 80%
Direxion Daily Russia Bear 3X Shares RUSS 25490K786 25460E828 1 for 5 80%
Direxion Daily S&P 500® Bear 3X Shares SPXS 25459Y371 25460E885 1 for 5 80%

ETF issuers typically perform reverse splits on products in order to boost their share prices, keeping them safely above the psychologically important $5 level. The market value of futures-based products are often eroded over time due to contango in the futures markets, which inevitably leads to long-term share price declines.

It’s important to note that leveraged ETFs are not geared toward long-term shareholders. Instead, they’re marketed to risk-tolerant traders looking to enter and exit positions quickly.

The Direxion Daily Gold Miners Index Bull 3X Shares (NYSE:NUGT) was trading at $8.86 per share on Wednesday morning, down $0.62 (-6.54%). Year-to-date, NUGT has gained 15.97%, versus a 6.73% rise in the benchmark S&P 500 index during the same period.

NUGT currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #13 of 21 ETFs in the Leveraged Commodities ETFs category.

Meanwhile, the Direxion Daily Junior Gold Miners Index Bull 3X Shares (NYSE:JNUG) was trading at $7.25 per share on Wednesday morning, down $0.6 (-7.64%). Year-to-date, JNUG has gained 29.93%.

JNUG currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #14 of 21 ETFs in the Leveraged Commodities ETFs category.


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