The Direxion Indexed Commodity Strategy Fund (DXCTX) has received a 5-star Morningstar Rating as of 30 September 2016.
The fund tracks the performance of the Auspice Broad Commodity Index, a quantitative long/flat index that can be exposed to up to 12 major commodities in the energy, metal, and agricultural sectors.
"Most traditional commodity funds provide static long-only exposure to commodities. This limits their potential to contribute to a portfolio's long-term performance because there's no way to get defensive," says Ed Egilinsky, head of alternatives for Direxion. "The long/flat approach makes the fund potentially more adaptive to volatile commodity markets."
The strategic index-based strategy of the fund includes a quantitative approach to commodity investing, with exposure to 12 commodities that can individually be long or flat. It has the ability to make position changes intra-month based on trends.
There is a monthly rebalance based on risk reduction where the allocation of individual components is reduced if volatility exceeds certain predetermined risk levels, and a "smart" contract roll approach designed to select cost-effective futures contracts to roll into upon expiration of current contract.
