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Direxion Daily S&P500® Bull 3X ETF SPXL Sustainability

Sustainability Analysis

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Sustainability Summary

Direxion Daily S&P 500 ® Bull 3X Shrs has a number of attributes that may meet the expectations of sustainability-focused investors, despite some issues worthy of attention.

This fund has relatively low exposure to ESG risk compared with its peers in the Trading Tools category, earning it the second highest Morningstar Sustainability Rating of 4 globes. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change, biodiversity, human capital, as well as bribery and corruption, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.

Direxion Daily S&P500® Bull 3X Shrs has an asset-weighted Carbon Risk Score of 7.0, indicating that its companies have low exposure to carbon-related risks. These are risks associated with the transition to a low-carbon economy such as increased regulation, changing consumer preferences, technological advancements, and stranded assets. The fund's current involvement in fossil fuels rests at 8.7%, which compares favorably with 11.2% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas.

Based on its prospectus, sustainability or ESG factors are not a focus in the investment process. In comparison, funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues. The fund exhibits relatively high exposure (10.31%) to companies with high or severe controversies. Companies with controversies may be involved in incidents such as corruption, employee abuses, and environmental incidents that have a negative impact on stakeholders or the environment. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. In addition, they can damage the reputation of both companies themselves and their shareholders.

ESG Commitment Level Asset Manager