Direxion Eyes Energy, Gold Miners as Next Niche Markets in ETF Push

Korea Economic Daily

Summary

Egilinsky said he defines Direxion’s clients as active traders who seek to capitalize on market volatility.
He said the firm is pursuing leveraged and inverse strategies built around niche markets such as energy, gold miners and biotech, as well as baskets of five core stocks.
Egilinsky said Direxion is reviewing income strategies, covered calls and crypto-related products as its next flagship offerings.

Forecast Trend Report by Period

"The trend is your friend, but if you want that friendship to last, you need the discipline to monitor returns every day."

Edward Egilinsky, Direxion’s head of global sales, distribution and alternatives, offered that advice in an April 10 interview with The Korea Economic Daily. He described Direxion’s clients not as passive investors who buy and hold, but as active traders who seek to capitalize on market volatility and react quickly to even a single headline.

Direxion, a familiar name among South Korean retail investors who trade overseas stocks, has built its business around that philosophy. Since its founding in 1997, the firm has established itself as a global first mover in leveraged and inverse exchange-traded funds.

Egilinsky said the next phase of growth will come from so-called niche markets such as energy, gold miners and biotech. Rather than simply following the broader market, Direxion wants to help traders improve their odds by targeting sectors that are highly sensitive to news and themes. Its goal, he said, is to keep rolling out tools that function like a precise surgical knife.

That strategy also underpinned products Direxion introduced last year that target specific sectors through baskets of roughly five stocks while still delivering leveraged and inverse exposure. Indexes with too many constituents can be slow to react, while single stocks can carry excessive risk, Egilinsky said. Direxion designed the strategy for traders looking for a middle ground by selecting just five core names. The firm plans to use established large-cap stocks to turn even small market niches into profit opportunities.

With rangebound trading dragging on, Direxion is also planning new products. Traders need to be able to generate returns not only in rising markets, but also during long stretches of sideways trading, Egilinsky said. The firm is reviewing income strategies, covered-call products and crypto-related offerings as its next flagship products.

Park Ju-yeon, The Korea Economic Daily reporter grumpy_cat@hankyung.com