Alternative investment specialist Direxion has launched a long/short currency fund based on the methodology of the Morgan Stanley Multi FX Enhanced V10 USD Index.
The Direxion Long/Short Global Currency Fund offers investors direct exposure to 19 currencies, in both developed and emerging markets. The strategy weighs interest rates, inflation, open interest and stock index performance when determining whether to invest long or short in an individual currency; targets volatility of 10%; and rebalances portfolio allocations monthly, at minimum.
“Our fund offers investors the opportunity to directly invest in foreign currencies and potentially benefit whether the U.S. dollar increases or decreases in value relative to those currencies,” said Edward Egilinsky, managing director and head of alternative investments at Direxion. “The fund sets itself apart in the marketplace by offering retail investors both the broad diversification of 19 global currencies—in developed and emerging markets—combined with a long/short approach.
“Currencies have historically displayed low correlations and independent return streams to other alternative asset classes and strategies, such as managed futures and hedge funds,” said Egilinsky. “The ability of a long/short currency strategy to perform in varied market conditions provides investors the potential for additional diversification within a stock and bond portfolio.”
Direxion Funds and Direxion Shares offer leveraged index funds, ETFs and alternative-class fund products. They are managed by Rafferty Asset Management, which was founded in 1997 and had approximately $7.3 billion in assets under management as of September 30, 2013.