DXCBXDXCVX Direxion Indexed CVT Strategy Bull & Bear Funds Mutual Fund

Overview

The Direxion Indexed Synthetic Convertible Strategy Bull & Bear Funds seeks investment results, before fees and expenses, that track the performance of the QES Synthetic Convertible Index (QSCI).

Fact Sheet Fund Guide Prospectus  

Principal Investment Strategy

Principal Investment Strategy

  • The fund tracks the QES Synthetic Convertible Index, which seeks to replicate the total return of the US convertible bond markets

  • The fund has the potential to provide liquidity, transparency and removes capacity constraints that may impact convertible bond strategies.

  • The fund utilizes broad-equity and fixed income indices to generate return stream of convertible universe

These funds use investment techniques that may be considered aggressive and may entail significantly higher than normal risk. Further, the funds employ leverage which can accelerate the velocity of potential losses.

About Convertible Bonds

Why Convertible Bonds?

  • Convertible bonds pay coupon interest like corporate bonds, yet can also be converted into stock

  • Provides and opportunity to receive current income, yet avoid the inherently limited upside of regular bonds

  • Potentially less sensitive to rising rates/inflation than plain-vanilla debt due to embedded option to convert to stock

  • Diversification in that issuers have less balance sheet than large-caps; gain exposure to small- and mid-cap companies without owning riskier equity

  • Provides the potential for higher capital structure than equity, yet issuer stock performance can flow through to convertible bonds

Diversification does not ensure a profit or protect against a loss. 

About the Index

The QES Synthetic Convertible Index is designed to capture high correlation and similar overall returns to the convertible bond universe by investing in liquid market instruments with comparable characteristics to convertible bonds. The index analyzes aggregate data in the convertible bond universe to determine sensitivity to factors like equity price changes, interest rate changes, and changes in credit spreads. It then builds a portfolio of equity, fixed income, and credit instruments to capture those exposures synthetically with greater liquidity than is possible in an actual portfolio of convertible bonds. The index has the ability to rebalance weekly.

How is the QES Synthetic Convertible Index providing exposure?

  • Investment grade and speculative grade equity sensitivity in the convertible universe is represented by S&P 500 and Russell 2000, respectively.

  • Investment grade and speculative grade credit sensitivity in the convertible universe is represented by the iBoxx liquid investment grade and liquid high yield bond indices, respectively.

  • Interest rate sensitivity in the convertible universe is represented by 5YR Treasuries. 

Fund Symbol DXCBX DXCVX
Bloomberg Index Symbol QSCI QSCI
CUSIP 254939234 254939226
Gross Expense Ratio 1.51% 1.35%
Net Expense Ratio 1.51% 1.35%
Inception Date Feb 05, 2014 Feb 05, 2014

Pricing and Performance

Price Information
NAVs and market price information as of September 16, 2014

Ticker Fund Name NAV NAV Change $ NAV Change % Market Price Closing Market Price Closing Change($) Market Price Closing Change(%) Premium / Discount
DXCBX Direxion Indexed CVT Strategy Fund 44.16 0.20 0.46
DXCVX Direxion Indexed CVT Strategy Bear Fund 34.49

Performance
NAVs and market price information as of September 16, 2014

All data as of 8/31/2014
Ticker Fund Name 1 Mo % 3 Mo % YTD 1 YR % 3 YR % 5 YR % 10 YR % Since Inception Inception Date Expense Ratio* (Gross/Net %)
DXCBX Direxion Indexed CVT Strategy Fund 5.64 3.76 12.46 1.51 / 1.51
DXCVX Direxion Indexed CVT Strategy Bear Fund -6.24 -5.41 -15.02 1.35 / 1.35
All data as of 6/30/2014
Ticker Fund Name 1 Mo % 3 Mo % YTD 1 YR % 3 YR % 5 YR % 10 YR % Since Inception Inception Date Expense Ratio* (Gross/Net %)
DXCBX Direxion Indexed CVT Strategy Fund 3.76 4.73 12.46 1.51 / 1.51
DXCVX Direxion Indexed CVT Strategy Bear Fund -4.01 -6.06 -13.76 1.35 / 1.35

The performance data quoted represents past performance; past performance does not guarantee future results; the investment return and principal value of an investment will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance quoted. Returns for performance for one year and under are cumulative, not annualized.

Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. For additional information, see the fund(s) prospectus or summary prospectus.

Distributions

Ticker Fund Name Record Date Ex Date Pay Date Income Dividend Short-Term Capital Gain Long-Term Capital Gain