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Is Direxion Monthly NASDAQ-100 Bull 1.75X Investor (DXQLX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Index funds, consider Direxion Monthly NASDAQ-100 Bull 1.75X Investor (DXQLX - Free Report) as a possibility. DXQLX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

DXQLX finds itself in the Direxion Funds family, based out of New York, NY. Direxion Monthly NASDAQ-100 Bull 1.75X Investor debuted in May of 2006. Since then, DXQLX has accumulated assets of about $531.58 million, according to the most recently available information. Tony Ng is the fund's current manager and has held that role since May of 2006.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. DXQLX has a 5-year annualized total return of 18.4%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 36.26%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. DXQLX's standard deviation over the past three years is 31.8% compared to the category average of 36.68%. Looking at the past 5 years, the fund's standard deviation is 37.17% compared to the category average of 35.86%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 2.15, so it is likely going to be more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. DXQLX's 5-year performance has produced a negative alpha of -4.97, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.

Currently, this mutual fund is holding 93.75% in stocks and it has a negligible amount of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:

  • Finance
  • Other

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, DXQLX is a no load fund. It has an expense ratio of 1.33% compared to the category average of 1.88%. DXQLX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $25,000; each subsequent investment needs to be at least $500.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Direxion Monthly NASDAQ-100 Bull 1.75X Investor ( DXQLX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Direxion Monthly NASDAQ-100 Bull 1.75X Investor ( DXQLX ) looks like a good potential choice for investors right now.

For additional information on the Index area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into DXQLX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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