Direxion lifts target exposure to three times for 10 leveraged funds

By Susanna Moon

Chicago, Sept. 21 - Direxion Shares ETF Trust said 10 of its leveraged funds will seek daily results of 300% or negative 300% of the performance of the fund's target index, magnified from the current 200% or negative 200%.

The board of trustees approved changes to the names, investment strategies and investment objectives of 10 leveraged funds, based on the recommendation of the funds' adviser, Rafferty Asset Management, LLC, according to a fund press release.

The changes will be effective Dec. 1 and apply to the following Direxion funds:

• Daily BRIC Bull 2X Shares will be renamed Daily BRIC Bull 3X Shares and Daily BRIC Bear 2X Shares will be renamed Daily BRIC Bear 3X Shares; they will track the BNY BRIC Select ADR index;

• Daily India Bull 2X Shares will be renamed Daily India Bull 3X Shares and Daily India Bear 2X Shares will be renamed Daily India Bear 3X Shares; they will track the Indus India index;

• Daily Gold Miners Bull 2X Shares will be renamed Daily Gold Miners Bull 3X Shares and the Daily Gold Miners Bear 2X Shares will be renamed Daily Gold Miners Bear 3X Shares; they will track the NYSE Arca Gold Miners index;

• Daily Natural Gas Related Bull 2X Shares will be renamed Daily Natural Gas Related Bull 3X Shares and the Daily Natural Gas Related Bear 2X Shares will be renamed Daily Natural Gas Related Bear 3X Shares; they will track the ISE-Revere Natural Gas index; and

• Daily Retail Bull 2X Shares will be renamed Daily Retail Bull 3X Shares and Daily Retail Bear 2X Shares will be renamed Daily Retail Bear 3X Shares; they will track the Russell 1000 Retail index.

The funds with "Bull" in its name seek daily investment results, before fees and expenses, of 200% of the fund's target index, whereas the funds with "Bear" in its name seek daily investment results of negative 200% of the fund's target index.

Beginning in December, each fund's investment objective will be changed to seek daily investment results of 300% or negative 300% of the performance of its specific target index.

With the new investment objectives, each fund may see greater gains but will also be subject to the risks of greater losses relative to the benchmark, the release noted.

Also the pursuit of daily goals may result in daily leveraged compounding for the funds, which means that the return of a target index over a period of time greater than one day multiplied by the fund's daily target generally will not equal a fund's performance over that same period.

The effects of such leveraged compounding will be greater for the funds once their new investment objective is effective, due to the fact that each fund will attempt to magnify the performance of its benchmark to a greater extent, the release said.

Direxion Shares is based in Boston.

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