Direxion

Direxion

Type	Trust
Founded	New York, NY
Headquarters	Newton, MA, U.S.
Key people	Daniel O’Neill, President and Chief Investment Officer; Andy O’Rourke, Chief Marketing Officer; Ed Egilinsky, Managing Director, Head - Alternative Strategy Products; Paul Brigandi, Senior Vice President Trading; David Fajardo, Senior Vice President Marketing; Jeffrey LeClair, Vice President E-Strategy; Sarah McCready, Vice President MarCom; Matthew McGuire, Senior Vice President, Key Accounts
Products	Mutual Funds, Leveraged Index Funds, ETFs, Leveraged ETFs, Alternative Investments, Inverse ETFs, Leveraged Inverse ETFs
AUM	US$ 7.8 billion (June 2011)
Website	[1], [2]

Direxion Funds and Direxion Shares are together referred to as Direxion.

About Direxion

Since its founding in 1997 as a leveraged index mutual fund provider, Direxion has been a leader in providing alternative and institutional style investment solutions to the broader investment community.^[1]

The company was originally established as Potomac Funds, however, it was later rebranded to Direxion Funds in 2006 during an effort to expand the firm’s sales and product distribution. Following its rebranding, the firm’s product line up was increased to include a wider array of leveraged index and alternative strategy mutual funds.

In 2008, Direxion Shares was launched, a provider of leveraged and inverse ETFs that provide exposure of up to 300% or -300% to the funds’ underling indexes.

Direxion Shares became well recognized quickly due largely to early acceptance and significant popularity of the Direxion Daily Financial Bull 3x Shares (FAS) and Direxion Financial Bear 3x Shares (FAZ), in the heart of the financial crisis of 2008. In 2009, Direxion Daily Financial Bull 3x (FAZ) traded over 27 Billion shares for the year, making it the 4th highest traded exchange traded product in volume on the New York Stock Exchange for the year.^[2]

Investment Philosophy

Direxion believes that the investment landscape has changed significantly since the establishment of Modern Portfolio Theory, and that markets are not always efficient. In the post-financial meltdown era volatility and uncertainty provide an avenue for those who understand that exploiting inefficiencies among different asset classes (including alternative asset classes) creates opportunity to add value on the way to their long-term investment objectives.

Direxion provides products and solutions that allow individuals and financial professionals to take advantage of near term market opportunities, in changing market conditions, while keeping an eye on their long-term goals.^[3]

Products and Services

Direxion Funds offers several leveraged and inverse, as well as alternative strategy mutual fund products and Direxion Shares offers a wide array of leveraged, inverse and non-leveraged ETFs.

The mutual funds offered by Direxion fall into 3 categories:

• Core Strategy-traditional asset allocation that incorporates a monthly tactical overlay to adjust to short-term market trends.^[4]

• Managed Tactical – Alternative Strategy Funds that seek to capture cyclical trends in up and down markets. These funds generally follow a rules-based methodology that actively allocates amongst holdings, generally using a long/short approach.^[5]

• Tactical Trading Funds – designed for active investors attempting to capitalize on short-term market movements. These funds consist of Direxion’s Monthly Leveraged Index Mutual Funds (bull and bear) and High Yield Funds.^[6]

All of Direxion’s mutual funds are available in no-load shares and in some instances, in C-shares and Institutional class shares. The no-load structure makes it possible to trade the tactical funds in a cost efficient manner.

Direxion Shares offers a series of both bull and bear exchange traded products which include:

• Daily 3x Leveraged ETFs

• Non-leveraged ETFs

Direxion's 3x leveraged ETFs seek daily goals, which means that the returns of the ETFs over time should not always be expected to be a multiple of the cumulative return off the benchmark for the longer period. By holding Direxion Shares Daily leveraged ETFs for periods longer than one trading day, investors subject their gains or losses to the fund’s daily rebalancing process which can either have a positive or negative impact on investment returns over multiple trading sessions. During periods of market volatility, funds typically underperform the multiple of the fund’s beta and benchmark performance while during periods of trending market performance, funds generally outperform.^[7]

These funds are intended for use only by sophisticated investors who: a) understand the risks associated with the use of leverage; b) understand the consequences of seeking daily leveraged investment results; and c) intend to actively monitor and manage their investments.

These funds are NOT intended for use by conservative investors who: a) cannot tolerate substantial losses in short periods of time; b) are unfamiliar with the unique nature and performance characteristics of funds that seek leveraged daily investment results; and c) are long-term investors who do not monitor their portfolios frequently.

Product 1sts

Direxion has introduced many firsts to the investment community:^[8]

• In 1999 they launched the first Short Small Cap Fund.

• In 2005, Direxion launched the first Leveraged Long 10-Year Bond Fund

• 2006 they launched the first 250% Leveraged Index (LI) Funds.

• In 2008, Direxion launched the first Long/Short pure Commodity Mutual Fund.

• Direxion launched the first 300% Leveraged Exchange Traded Funds (ETF) in 2008.

References

1. ^ About Direxion Funds (http://www.direxionfunds.com/about.html)
2. ^ Information obtained from the New York Stock Exchange (http://www.nyse.com/)
3. ^ How Modern is Your Portfolio Theory? (http://marketing2.direxionfunds.com/?elqPURLPage=24)
4. ^ Core Strategy Fund > The Direxion Wilshire Dynamic Fund (http://direxionfunds.com/funds/dwdf_highlights.html)
5. ^ Managed Tactical Funds (http://direxionfunds.com/funds/managed.html)
6. ^ Tactical Trading Funds (http://direxionfunds.com/funds/tactical.html)
7. ^ Understanding Leveraged Exchange-Traded Funds (http://www.direxionshares.com/pdfs/Understanding_Exchange_Traded_Funds.pdf)
8. ^ About Direxion Shares (http://www.direxionshares.com/about.html)

External links

• Direxion Shares website [3]
• Direxion Funds website [4]