FlexDirex: A new way to play offense (and defense)

By Jerry Wagner

Last Thursday’s Thanksgiving game was a heartbreaker here in Detroit. Our Lions fell to the Packers—likely ending hopes for a third straight North Division crown. As a lifelong fan, I felt that familiar mix of pride and frustration. The lesson from football, though, is bigger than any one game: Championships aren’t decided by a single play. They’re won by process—a disciplined game plan that blends precision offense with situational defense, executed over four quarters and an entire season.

That’s the same philosophy behind FlexDirex, our new first-to-market, actively managed single-stock ETF SMA strategies.

Why precision matters in a noisy market

Focused investing can look like a “go route” from the stands, but good teams don’t just heave it and hope. They call scripted plays—but also use pre-snap adjustments.

FlexDirex follows that mindset. It seeks concentrated opportunity in high-profile names—but does so inside a rules-based framework that emphasizes position sizing, risk pacing, and the option to step back when conditions deteriorate:

•  Selection is systematic and refreshed weekly, so the roster can adapt as leadership changes.

•  Position sizing is driven by Targeted Volatility Analysis (TVA), which seeks to keep portfolio risk near a defined level by hedging with short-term Treasurys (SHY).

•  A tactical-signal overlay can cap equity exposure when risk indicators increase; exposure can be dialed down with SHY—field position over forcing a throw.

•  Precision here means the right player, the right role, and the right moment—the way a good staff scripts openers, manages the clock, and adjusts at halftime.

First step: Picking the right team

We start with a universe drawn from Direxion’s single-stock ETFs—separate ETFs meant to represent the price movements of more than 40 major companies, including each of the “Magnificent Seven” and standouts across other sectors—like Eli Lilly, Exxon, Boeing, and Ford. From that roster, we assemble the weekly lineup of about 10 players using a momentum ranking process refined over more than a decade that also considers volatility, correlation, and trend persistence. The aim is to put the best team on the field for the next series.

On-field reads: Adjusting at the line

Great offenses don’t just run the called play; they read the defense at the line and shift protections, routes, and timing. Great defenses do the same—reading formation, motion, and cadence to rotate coverage, disguise pressure, or drop into a zone. FlexDirex follows that disciplined approach each week.

After selecting our roster of potential positions, we conduct a weekly review that functions like pre-snap recognition:

•  Coverage ID (leadership and lineup): Reassess the ranking of candidates—who’s breaking open, who’s being bracketed, and who should stay on the sideline this series.

•  Protection call (volatility analysis): Size positions with TVA to keep overall risk near the target.

•  Check-with-me (tactical positioning): If market conditions shift, we can pivot to short-term Treasurys (SHY), reducing equity exposure based on our tactical-signal overlay—equivalent to killing the first call when the front changes. Press when the pocket is clean; tighten protection when pressure builds.

The goal is the same on every down: Put the right players in the right roles at the right time—then adjust to what the market is actually showing, not what we hoped to see in the huddle.

Offense and defense: Seeking opportunity both ways

Great teams have playbooks for every situation—third-and-long, fourth-and-short, in the red zone, and with goal-to-go. FlexDirex is designed with that same versatility.

It can use both 2X long and –1X inverse single-stock ETFs within a disciplined process. When the market tape shows strength, we can go for it; when trends break, we can look to the defense rather than simply hope for a good outcome.

Two formations, two tempos:

1.  Tech Plus targets a NASDAQ-style risk profile (higher octane).

2.  Focused Core targets an S&P-style risk profile (broader, steadier).

Both are aimed at annual average daily standard deviation goals for their respective indexes.

While each strategy is hedged differently to reflect its targeted volatility, both use the same ETFs and sit within the same tactical-signal framework that can shift to SHY when the field gets slick. Offense when the lane is open, and defense when the situation says “be smart.”

Where FlexDirex fits in a diversified lineup

FlexDirex isn’t a trick play you bring in occasionally. It’s on the field every series next to your passive core—adding focus to leadership names while actively managing risk in real time.

How advisers typically deploy it:

•  As a permanent dynamic, risk-managed satellite sleeve accompanying a passive S&P/NASDAQ core—there before risk shows up, not after.

•  As an execution system that keeps selection, sizing, and de-risking systematic rather than emotional.

•  As a matchup edge when leadership is narrow or rotating—without abandoning the stability of the passive core.

This is about execution, not prediction: the right players, the right roles, the right size—every snap. Your passive core sets the foundation; FlexDirex stays on the field to apply continuous, rules-based offense and defense as conditions change.

Process > single outcomes (and why last Thursday proves the point)

Fans remember the final score; coaches remember third-down conversions, red-zone calls, and hidden yards on special teams. Investors often do the reverse—anchoring to a quarterly headline and overlooking whether their plan is on pace for its goal at their risk level.

That’s why our clients and advisers should lean on the OnTarget Monitor (see “How to judge success” sidebar). It’s the scoreboard that matters for your household: a personalized benchmark built from your suitability answers (goal, horizon, risk tolerance) and your actual strategy mix. If the black line (your after-fee value) is in the green or blue, you’re on pace—regardless of what an index did last week. If it drifts to the yellow or red, that’s a timeout and a review—not a panic.

Championships are won by staying on script, not by chasing the crowd’s highlight reel.

 

Final whistle

Last Thursday’s loss hurt. It also underscored a simple truth: You can outgain an opponent for stretches and still lose the game if you don’t manage situations—field position, clock, and risk—on every down.

FlexDirex was built for that kind of four-quarters discipline. It’s not about a single big play; it’s about making the right adjustment at the line, sizing the risk, and switching personnel when the look changes. That’s how you stay in the game when momentum flips—and how you’re ready when it turns back.

Momentum rotates. Conditions evolve. Seasons shift. Winning, in football and in investing, comes from calling the right play—and executing it—again and again.

Field a focused offense and defense, watch your OnTarget Monitor, and play the next down with discipline.