Direxion, a leading provider of leveraged & inverse and thematic ETFs, today announced the launch of the Direxion Breakfast Commodities Strategy ETF (Ticker: BRKY), a first-of-its kind exchange-traded fund offering exposure to the commodities that comprise the most important meal of the day.
BRKY tracks the S&P GSCI Dynamic Roll Breakfast (OJ 5% Capped) Index, which includes a basket of six commodities—corn, coffee, lean hogs (bacon), orange juice concentrate, sugar, and wheat. As the first ETF comprised of these breakfast commodity futures, BRKY provides access to commodities whose prices are increasing due to supply chain pressures, geopolitical tensions, and weather-related issues. In a period of persistent inflation, this basket of commodities may offer strong diversification characteristics, due to their non-correlated returns in comparison to stocks and bonds.
“2022 has been one of the most challenging environments for traditional portfolios in decades,” said Direxion Managing Director and Head of Product David Mazza. “Investors can no longer rely on only stocks and bonds to meet their financial goals. Breakfast commodities can play an important role in providing diversification, as well as a hedge against the inflation we are all feeling in our wallets.”
The global food supply chain is more interconnected than ever, and unfortunately is facing pricing pressures from the conflict in Ukraine, droughts in countries such as Brazil, and more countries like India restricting food exports. In fact, food prices hit their highest levels ever in April 2022, according the Food and Agriculture Organization of the United Nations (FAO). Year-over-year, they increased 30%, highlighting the extreme nature of these challenges.
“Everyone is feeling the impact of inflation,” said Mazza. “Even the price of a cup of coffee, or a bowl of cereal, has skyrocketed. But there is an opportunity to take advantage of these rising prices in your portfolio by investing in these commodity staples with BRKY.”
Direxion equips investors who are driven by conviction with ETF solutions built for purpose and fine-tuned for precision. These solutions are available for a broad spectrum of investors, whether executing short-term tactical trades, or investing in thematic strategies. Direxion’s reputation is founded on developing products that precisely express market perspectives and allow investors to manage their risk exposure. Founded in 1997, the company has approximately $28.6 billion in assets under management as of March 31, 2022. For more information, please visit www.direxion.com.
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An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-716-0735 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.
Direxion Shares ETF Risks –An investment in the Fund involves risk, including the possible loss of principal. The Fund is non-diversified and includes risks associated with concentration that results from the Fund’s investments in a particular industry, sector, or geographic region which can result in increased volatility. The Fund’s use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. Risks of the Fund include Index Correlation Risk, Index Strategy Risk, Derivatives Risk, Commodity-Linked Derivatives Risk, Futures Strategy Risk, Breakfast Commodities Risk, Agriculture Investment Risk, Market Risk, Counterparty Risk, Cash Transaction Risk, Subsidiary Investment Risk, Interest Rate Risk, and Tax Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of the Fund.
Exchange-traded commodity futures contracts generally are volatile and are not suitable for all investors. The value of a commodity-linked derivative investment typically is based upon the price movements of a physical commodity and may be affected by changes in overall market movements, volatility of the index, changes in interest rates, or factors affecting a particular industry or commodity, such as global pandemics, weather and other natural disasters, changes in supply and production, embargoes, tariffs and international economic, political and regulatory developments and changes in speculators' and/or investors' demand. Commodity-linked derivatives also may be subject to credit and interest rate risks that in general affect the value of debt securities. The Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments.
Risks associated with the use of futures contracts are (a) the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; (b) possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the Index’s inability to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors; (e) the possibility that the counterparty will default in the performance of its obligations; and (f) if the Fund has insufficient cash, it may have to sell securities or financial instruments from its portfolio to meet daily variation margin requirements, which may lead to the Fund selling securities or financial instruments at a time when it may be disadvantageous to do so.
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