Distributions Q&A

Question: Why don't the bear funds pay income distributions?
Answer: Our bear funds won't be subject to income distributions since their inverse exposure is obtained through total return swaps. The bull funds use a combination of equities and total return swaps - the equity portion is responsible for generating the income distributions. It is possible for bear funds to generate capital gains based on the trading of total return swaps.

Question: What is the "Ex-Date"?
Answer: The Ex-Date is the date in which an ETF's NAV is reduced by the amount of the fund's dividend distribution. Shareholders who purchase an ETF on the Ex-Date will be purchasing the fund at the adjusted NAV and therefore would not be subject to the receipt of the distribution. Ex-Date typically precedes the "Record Date" by two business days.

Question: What is the "Record-Date"?
Answer: The Record-Date is the date on which shareholders of record is determined. Record date is typically two trading days after Ex-Date, however, since ETFs settle three business days after transaction (T+3), Record Date indicates those who owned the ETF one trading date prior to the Ex-Date. An investor must be listed as a holder of record on Record-Date to receive the distribution.

Question: What is the "Pay-Date"?
Answer: Pay-Date is the date on which distributions are paid to the holder of record. Pay-Date is usually 5 trading days after the Ex-Date and 3 trading days after Record-Date.

Question: Why is it that I do not receive my distributions until 5 days after the Ex-Date?
Answer: This is due to the normal settlement process required for any security. There are 2 business days between Ex-Date and Record-Date and 3 days between record and the Payable-Date.

Question: Why are income and capital gains produced in your ETF's? Aren't ETF's tax efficient?
Answer: Most non-leveraged ETF's are generally tax efficient because the methods used to obtain their exposure generally can be managed to avoid taxable events. Leveraged ETF's don't share the same tax benefits of traditional ETFs because the investments used to obtain their exposure can generate income and capital gains.

Question: How are leveraged ETF distributions displayed on 1099s?
Answer: Short-term capital gains and net investment income are reported as ordinary income and Long-term capital gains are reported as mutual fund capital gains.

Question: How will a particular distribution affect my options contract?
Answer: Please reference the Options Clearing Corporation website at http://www.optionsclearing.com/ for options contract updates and adjustments.

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An investor should consider the investment objectives, risks, charges, and expenses of Direxion Shares carefully before investing. The prospectus and summary prospectus contain this and other information about Direxion Shares. Click here to obtain a prospectus and summary prospectus. The prospectus and summary prospectus should be read carefully before investing.

The Funds are designed to be utilized only by sophisticated investors, such as traders and active investors employing dynamic strategies. Such investors are expected to monitor and manage their portfolios frequently. Investors in the Funds should (a) understand the consequences of seeking daily investment results, (b) understand the risk of shorting, and (c) intend to actively monitor and manage their investments.

An investment in the Funds involve risk, including the possible loss of principal. The Funds are non-diversified and include risks associated with concentration risk that results from the Funds' investments in a particular industry or sector which can increase volatility. The use of derivatives such as futures contracts, forward contracts, options and swaps are subject to market risks that may cause their price to fluctuate over time. The Fund does not attempt to, and should not be expected to, provide returns which are a multiple of the return of the Index for periods other than a single day. For other risks including correlation, leverage, compounding, market volatility and specific risks regarding each sector, please read the prospectus.

Distributor: Foreside Fund Services, LLC.