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The ETF product development process, as best I can tell, begins with a whiteboard, a list of recently battered companies, and the question: “But what if you could lose money twice as fast?”
This batch of new listings delivered a masterclass in that philosophy. Thirteen new products today. Three of them made me put down my coffee.
Direxion Daily UNH Bull 2X ETF
Let us begin with the pièce de resistance.
UnitedHealth Group, for those who have somehow missed the news cycle, has had what industry analysts might diplomatically describe as a difficult period. Its CEO was shot dead outside a hotel in Midtown Manhatten. The company then replaced him, only for the replacement to resign for ‘personal reasons’ – this after the company had already cut its annual earnings forecast nearly in half. The company is cooperating with federal investigations into its Medicare billing practices. Its stock has shed roughly half its value from its peak. A West Virginia lawsuit has accused it of worsening the state's opioid crisis. Warren Buffett stepped in to buy shares, which is either a vote of confidence or the most expensive act of value tourism in recent memory, depending on your disposition.
And into this particular bonfire, Direxion has decided to introduce a 2x leveraged bull product.
I want to be clear: I do not think this is a bad product. I think it is, in a perverse way, a perfectly logical one. The underlying is cheap relative to its history. The franchise, however battered, is enormous. The contrarian case writes itself. And Direxion's job is not to judge the narrative; it is to provide the instrument.
But still. A 2x leveraged bull on a company that lost more than a quarter of a trillion dollars in market value in a single month, whose chief executive was murdered, and which is currently under federal investigation. There is audacity here. The kind you normally only see in extreme sports or certain types of cooking competition.
Direxion Daily ADBE and Direxion Daily PYPL ETFs
Apparently encouraged by its own confidence, Direxion has also delivered a bull product on Adobe and another on PayPal, arriving in the same batch, wearing matching hats.
Adobe, for context, has seen its stock fall by more than a third over the past year. The company tried to acquire Figma for $20 billion. Regulators blocked it. Figma went public anyway and is now growing at nearly 40% annually. Meanwhile, AI image generation tools that Adobe does not fully control have arrived at a pace suggesting the entire concept of licensed creative software may be renegotiable. The CEO, who has led the company for nearly two decades, has announced his departure. Adobe's competitive moat, once unquestionable, is now the subject of earnest debate among people whose job it is to ask such things.
PayPal, meanwhile, trades at a small fraction of its all-time high set years ago. Apple Pay holds a commanding share of the US mobile wallet market. Stripe and Adyen continue their territorial expansion. PayPal replaced its chief executive, received a modest profit forecast that the market greeted with a 19% single-session decline, and then replaced the replacement with an executive imported from the printer-and-laptop business. The company is not without its assets: it processes enormous payment volumes, generates substantial free cash flow, and is attempting to position itself for AI-driven commerce. But the phrase “sleeping giant” has appeared in so much PayPal commentary that the giant in question must be in a medically induced coma.
Direxion, undeterred, offers 2x the journey in both cases. I respect the commitment to the full range of human experience.
The Sensible Corner
Not everything in today’s batch was designed to raise an eyebrow. Vanguard filed a hedged global technology ETF for Australian investors and an international high-dividend yield product alongside it. UBS quietly added a core European equity ETF. Amundi brought an S&P Global Financials ESG product to London. Janus Henderson filed a US equity income strategy.
These are reasonable products doing reasonable things for reasonable people. They will not generate a LinkedIn post and they will not be discussed at conferences. They will, in all likelihood, simply compound quietly for decades, untroubled by the chaos around them.
Which is, of course, the entire point.
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