Direxion To Shut Down BARS, The 3x Gold Bear ETF – ETF News And Commentary
Direxion – a renowned player in the leveraged and inverse leveraged ETF world – which was recently in the news for opting for a reverse split of its 2 leveraged ETFs – Direxion Daily Junior Gold Miners Bull 3x Shares (NYSEARCA: JNUG ) and Direxion Daily Russia Bull 3x Shares (NYSEARCA: RUSL ) – has now decided to shut down an inverse ETF targeting the gold bullion market. The product, Direxion Daily Gold Bear 3x Shares (NYSEARCA: BARS ), which was launched in April this year will cease trading on December 26 and its assets will be liquidated on December 30. BARS tracks the Gold Benchmark Futures Contract to provide three times the daily inverse performance of gold futures (read: Direxion Opts for Reverse Split for 2 Leveraged ETFs ). Given that the fund has returned roughly 8% since its inception, the closure comes as somewhat of a surprise. However, Direxion believes that the fund’s inability to garner sufficient assets has forced it to close the fund. BARS currently manages less than $5 million assets and is quite pricey with 1.56% as expenses. The high expense fee might have been a factor for the fund’s failure to lure sufficient investor interest. Moreover, BARS faced stiff competition from other bear products on gold such as ProShares UltraShort Gold (NYSEARCA: GLL ), PowerShares DB Gold Double Short ETN (NYSEARCA: DZZ ) and VelocityShares 3x Inverse Gold ETN (NASDAQ: DGLD ). While GLL has managed to garner $88.4 million since its inception, DZZ and DGLD currently manage assets worth $73 million and $16.9 million respectively (see all Precious Metals ETFs here ). It’s worth noting that Direxion Daily Gold Bull 3x Shares ( BAR ) , which was launched together with BARS and manages an AUM base of just $2.8 million and is as pricey as BARS, will continue to trade. Apart from the recent closure, Direxion had announced closures of five of its inverse 3x ETFs this September. The ETFs in question are Direxion Daily Brazil Bear 3x Shares (BRZS), Direxion Daily FTSE Europe Bear 3x Shares (EURZ), Direxion Daily Japan Bear 3x Shares (JPNS), Direxion Daily South Korea Bear 3x Shares (KORZ) and Direxion Daily Natural Gas Related Bear 3x Shares (GASX) (see all Leveraged Equity ETFs here ). Including the recent fund closure, more than 65 ETF products have been shut down or are scheduled to be closed this year. In comparison with this, we have seen roughly 192 new product launches this year, as per ETF.com. With the recent launches, the fast evolving U.S. ETF industry now has more than 1,660 products in the market with a total market cap of $1,943.05 billion.