Literature
The literature page contains a growing library of in depth educational materials regarding the nature of leveraged ETF’s and the many benefits they can provide. In addition, you will find strategies and applications to assist you as you endeavor to utilize leveraged ETFs.
Understanding Leveraged Exchange-Traded Funds >
Leveraged ETFs are unique and potentially volatile investments that should be understood clearly before investing. This brochure provides insight into Direxion Shares’ fund composition and management process and discusses the risks associated with them.
Understanding Impact of Changing Market Exposure of Leveraged ETFs >
Leveraged ETFs performance can be significantly affected both positively and negatively by fluctuating market exposure. This piece provides a clear understanding of how market exposure can affect performance of these investments over time.
An Example of Daily Investment Results >
The return of a benchmark index for a given period tells you little about what that Direxion Shares ETF will return for that same period. The path a benchmark takes to obtain that return can be of much greater consequence. This piece is an actual example of how recent market volatility can affect the investment results of a long and short leveraged ETF pair.
Leveraged ETFs: Pursuing Daily Targets in Volatile Markets >
Intraday exposure levels in Daily 3x ETFs could vary significantly on days when the value of the benchmark Index fluctuates significantly. In this paper we review the characteristics of intraday changes, their associated risks and how to manage them.
Understanding Taxable Distributions >
In relation to traditional ETFs, leveraged index ETFs are generally less tax efficient due to inherent need for daily rebalancing in response to daily market movements. However, most leveraged ETF investors do not think about distributions the same way investors with a long-term 'buy-and-hold' mindset do. More...
The Effect of Time, Trend, Volatility, and Leverage on Relative Returns >
This academic paper by William J. Trainor Jr., Ph.D., CFA at East Tennessee State University, is a study on the effect of time, return trend, volatility, leverage ratio, and the rebalancing period on leverage Exchange Traded Funds' (ETFs) returns relative to the underlying index. Learn More...
An investor should consider the investment objectives, risks, charges, and expenses of Direxion Shares carefully before investing. The prospectus contains this and other information about Direxion Shares. Click here to obtain a prospectus. The prospectus should be read carefully before investing.
Investing in index funds may be more volatile than investing in broadly diversified funds. The use of leverage by a fund means the Funds are riskier than alternatives which do not use leverage.
The ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investments. The Funds are not designed to track the underlying index over a longer period of time.
The risks associated with the funds are detailed in the prospectus which include adverse market condition risk, adviser's investment strategy risk, aggressive investment techniques risk, concentration risk, counterparty risk, credit and lower-quality debt securities risk, equity securities risk, currency exchange risk, daily correlation risk, daily rebalancing and market volatility risk, depository receipt risk, foreign and emerging markets securities risk, sector securities risk, interest rate risk, inverse correlation risk, leverage risk, market risk, non-diversification risk, shorting risk, small and mid cap company risk, tracking error risk, and special risks of exchange-traded funds, market timing activity and high portfolio turnover risk, investing in other investment companies and ETFs risk, commodities securities risk, geographic concentration risk, valuation time risk, derivatives risk, commodity-linked derivatives risk, wholly-owned subsidiary risk, tax risk, options and futures contracts risks, security selection risk, Debt Instrument Risk, Gain Limitation Risk, Real Estate Investment Risk, U.S. Government Securities Risk, and Special Risks of Exchange-Traded Funds. Shorting securities occurs when investors sell securities they don’t own and are committed to repurchasing eventually.
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