$Direxion HCM Tactical Enhanced U.S. ETF(HCMT)$ is an actively managed exchange-traded fund. It focuses on U.S. equities and leverages a proprietary tactical indicator to toggle between 200% leveraged exposure to equities or 100% allocation to cash or cash equivalents, depending on market conditions. This strategy aims to capitalize on broad trends in the U.S. equity markets.
Some key characteristics and advantages of HCMT include:
1. **High Performance Potential**: The ETF seeks to capture up to 200% of the market upside while reducing exposure during downturns. It had a 1-year return of over 29% as of mid-2024
2. **Active Risk Management**: The fund uses a rules-based model, the HCM-BuyLine, which shifts investments between equities and cash depending on market signals. This approach helps mitigate risk during market downturns
3. **Sectoral and Diversified Exposure**: The fund includes top U.S. tech stocks such as Microsoft, Apple, and NVIDIA, while also balancing with broader sectoral exposure. This combination provides both focused tech sector growth and overall market diversification
4. **Expense Ratio**: HCMT has a net expense ratio of 1.17%, which is slightly higher than average but reflective of its active management strategy and leveraged approach
In summary, HCMT is designed for investors seeking aggressive growth through tactical exposure to U.S. equities, with built-in mechanisms for downside protection. However, its leveraged nature also introduces higher volatility, making it suitable for risk-tolerant investors.
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