A sound investment process and strong management team underpin Direxion Auspice Broad Cmdty Strat ETF's Morningstar Medalist Rating of Silver. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The strategy's sensible investment philosophy earns it an Above Average Process Pillar rating. The team managing the passive product drives the strategy's Above Average People Pillar rating. The strategy is part of a first-rate parent that has overall attractive fees and high portfolio management retention. These attributes support its Above Average Parent Pillar rating.

Analyst Rating

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Direxion Auspice Broad Cmdty Strat ETF earns an Above Average Process Pillar rating. The most significant contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Strong risk-adjusted performance also bolsters the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. 

The investment strategy as stated in the fund's prospectus is as follows: 

 The investment seeks investment results, before fees and expenses, that track the Auspice Broad Commodity Index.  The index is a rules-based index that attempts to capture upward trends in the commodity markets while minimizing risk during downtrends by tracking a portfolio of commodity futures contracts. The index uses a quantitative methodology to track a diversified portfolio of 12 different commodity futures contracts, or “components.” The fund generally will not invest directly in the 12 commodity futures contracts that comprise the index. The fund is non-diversified.

Above Average

Process

Direxion’s team earns an Above Average People Pillar rating. The most significant contributor to the rating is the firm's five-year retention rate of 100%. The stability of the management team also bolsters the rating. Specifically, the fund has not seen a manager change in the last seven years. Lastly, the rating is limited by the parent firm's five-year success ratio of 25%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

People

Direxion remains well-positioned in an increasingly competitive industry, earning it an Above Average Parent Pillar rating. Direxion stands out from a cost perspective for open-end and exchange-traded funds, demonstrating a firm-wide commitment to minimizing costs and maximizing investors' returns. On average, fees for the firm's funds are in the second-lowest quintile of category peers. Direxion has brought continuity to its product shelf, with low portfolio management turnover compared with peer firms over the past five years.

Parent

Direxion Auspice Broad Commodity Strategy ETF

COM tracks a broad-market index consisting of 12 commodity futures contracts, weighted by historical volatility, which can toggle to cash based on momentum. The fund will also hold short-term fixed income securities as collateral.

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Direxion Auspice Broad Commodity Strategy ETF is a commodities-focused exchange-traded fund that invests in a basket of 12 commodities futures contracts. The fund aims to outperform the Auspice Broad Commodity Index and reduces volatility by exiting positions when proprietary signals indicate a bear market. COM has low volatility compared to its peers, offers diversification benefits, and has shown strong performance during commodity up-cycles.

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A generational demand shock and global supply constraints have the commodity sector poised for a shift unseen since the 1970 supercycle. Direxion Auspice Broad Commodity Strategy ETF has been a top performer, producing more return relative to its risk, making it an attractive solution for investors given the high level of volatility and drawdown in commodities. COM historically requires less than 10% of capital to attain the commodity futures positions, with >90% invested in cash. Today, with cash yielding ~5%, that is a significant tailwind.

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