Direxion May Launch Equal-Weight Nasdaq ETF

Direxion, the ETF issuer most known for its leverage and inverse offerings, updated a 2010 filing that included plans for three sector ETFs, showing the funds could be close to making their debuts and perhaps the most interesting of the lot is a new ETF that takes an equal-weight approach to the Nasdaq 100. Direxion, the eleventh-largest U.S. ETF issuer by assets, could launch the Direxion Nasdaq-100 Equal Weighted Index Shares under the ticker “QQQE,” which would be an equal-weight rival to the PowerShares QQQ QQQ. QQQ, which is weighted by market cap, was recently forced to rebalance after the Nasdaq rebalanced its top 100 members to reduce Apple's AAPL dominance in the group, but the methodology used to update the Nasdaq-100′s market-cap sized weightings has been criticized as antiquated by some indexing experts, Barron's notes. The Direxion offering will face stiff competition in QQQ, which is over 11 years old and has about $22.5 billion in assets under management. That said, equal-weight ETFs have proven popular with investors as highlighted by the stature of Rydex, the biggest purveyor of equal-weight funds, in the ETF universe. At the end of May, Rydex was the tenth-largest U.S. ETF issuer with over $9 billion in AUM. Not to mention, the equal-weight approach works, a fact highlighted by performance of the Rydex S&P 500 Equal Weight ETF RSP, which has outperformed the S&P 500 over the past year, two years and five years. In May, Direxion filed plans to launch nine new India-specific ETFs and the firm also launched the first leveraged plays on Russia, the Direxion Daily Russia Bull 3X Shares RUSL and the Direxion Daily Russia 3X Bear Shares RUSS along with the first leveraged funds on agriculture stocks, the Direxion Daily Agribusiness 3X Bull Shares COWL and the Direxion Daily Agribusiness 3X Bear Shares COWS.