Dave Fry recently interviewed Andy O’Rourke, Sr VP at Direxion Funds. Dave starts the interview off addressing investor education when it comes to leveraged funds, and the push to educate investors about daily funds.
Dave then focuses on a few funds specifically the Direxion Daily 2 Yr Trsy Bull 3X Shares (TWOL), and the Direxion Daily 2 Yr Trsy Bear 3X Shares (TWOZ). These funds seek daily investment results, before fees and expenses, of 300% of the straight and inverse of the price performance of the NYSE ARCA Current 2-Year Treasury index. Interestingly enough, Andy O’Rourke states that, because of the low volume and volatility of these funds, they could be used (cautiously) as a portfolio hold for more than one day.
The third segment dives into what happens when you hop into a monthly rebalanced fund mid month. The results vary between the straight and inverse funds. Based on what you are trying to achieve, you can tailor your trade by taking advantage of these differences.
There is a good amount of interesting information shared in the video, and although it is a bit lengthy, it is a worthwhile watch. See the video below: