Direxion details new funds that track QEX Synthetic Convertible index

By Toni Weeks

San Luis Obispo, Calif., Jan. 31 - Direxion Funds announced in an N-1A filing with the Securities and Exchange Commission details about its upcoming new funds, which both target convertible securities. Paul Brigandi and Tony Ng will be the portfolio managers for both funds.

The Direxion Indexed Synthetic Convertible Strategy Fund seeks investment results, before fees and expenses, that track the performance of the QEX Synthetic Convertible index, a rules-based proprietary model that seeks returns that correlate and reflect the aggregate U.S. convertible bond universe, excluding convertible preferred securities and Rule 144A securities that may be considered convertible bonds. The portfolio will be comprised of futures contracts, corporate bonds, exchange-traded funds and cash equivalents. The index does not include convertible bonds but utilizes other securities or derivatives to provide returns similar to the aggregate U.S. bond market.

The Direxion Indexed Synthetic Convertible Strategy Bear Fund will seek investment results, before fees and expenses of the inverse of the performance of the above index. The fund creates short positions utilizing financial instruments that provide exposure to the index; financial instruments will include futures contracts on stock and fixed-income indexes, swap agreements, short positions, options on securities and stock indexes.

The ticker symbols are "DXCBX" for the first fund and "DXCVX" for the bear fund.

Including management fees of 0.75%, total annual fund operating expenses are expected to be 1.51% for the convertible fund and 1.35% for the convertible strategy bear fund.

New York-based Rafferty Asset Management, LLC will serve as the investment adviser.

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