| Summary Prospectus |
April 2, 2024 |
| Direxion Shares ETF Trust |
|
Direxion Daily NVDA Bull 2X Shares
| Ticker: NVDU |
| Listed on: The Nasdaq Stock Market LLC |
Before you invest, you may
want to review the Fund’s prospectus, which contains more information about the Fund and its risks. You can find the Fund’s prospectus, reports to shareholders,
and other information about the Fund online at http://www.direxion.com/regulatory-documents. You can also get this information at no cost by calling (866) 476-7523 or by sending an
email request to info@direxionshares.com. The Fund’s prospectus and statement of additional information, both dated February 28, 2024, as supplemented, are
incorporated by reference into this Summary Prospectus.
Important Information Regarding the Fund
Please note: Effective April 2, 2024, the investment objective of the
Fund changed and the Fund now seeks daily leveraged investment results, before fees and expenses, of 200% of the daily performance of the underlying security noted below.
The Direxion Daily NVDA Bull 2X Shares (formerly the Direxion Daily
NVDA Bull 1.5X Shares) (the “Fund”) seeks daily leveraged (2X) investment results and is very different from most other exchange-traded funds. As a result, the Fund may be riskier than alternatives that do not use leverage
because the Fund’s objective is to magnify the daily performance of the common shares of NVIDIA
Corporation (NASDAQ: NVDA) ("NVDA"). The return for investors that invest for periods longer or shorter
than a trading day should not be expected to be 200% of the performance of NVDA for the period. The
return of the Fund for a period longer than a trading day will be the result of each trading day’s
compounded return over the period, which will very likely differ from 200% of the return of NVDA for that
period. Longer holding periods, higher volatility of NVDA and leverage increase the impact of compounding
on an investor’s returns. During periods of higher the underlying security volatility, the
volatility of NVDA may affect the Fund’s return as much as, or more than, the return of NVDA.
The Fund is not suitable for all investors. The Fund is designed to
be utilized only by knowledgeable investors who understand the potential consequences of seeking daily leveraged (2X) investment results, understand the risks associated with the use of
leverage and are willing to monitor their portfolios frequently. The Fund is not intended to be used by, and is not appropriate for, investors who do not intend to actively
monitor and manage their portfolios. For periods longer than a single day, the Fund will lose money if NVDA’s performance is flat, and it is possible that the Fund will
lose money even if NVDA’s performance increases over a period longer than a single day. An investor could lose the full principal value of his/her investment within a single day if
NVDA loses more than 50% in one day.
Investment Objective
The Fund seeks daily investment results, before fees and expenses, of 200% of the daily performance of NVDA. The Fund does not seek to achieve its stated investment objective for a period of time
different than a trading day.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you
buy, hold, and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and
example below.
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
| Management Fees |
0.75% |
| Distribution and/or Service (12b-1) Fees |
0.00% |
| Other Expenses of the Fund |
1.14% |
| Acquired Fund Fees and Expenses(1)
|
0.09% |
| Total Annual Fund Operating Expenses |
1.98% |
| Expense Cap/Reimbursement(2)
|
-0.94% |
| Total Annual Fund Operating Expenses After Expense Cap/Reimbursement |
1.04% |
(1)
"Acquired Fund Fees and Expenses" include fees and expenses incurred indirectly by the Fund as a result of investments in other investment companies, including investments in money
market funds. Because Acquired Fund Fees and Expenses are not borne directly by the Fund, they will not be
reflected in the expense information in the Fund's financial statements and the information presented in
the table will differ from that presented in the Fund's financial highlights included in the Fund's reports to shareholders.
(2)
Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating
Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has
contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2025, to the extent that the
Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets
(excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund
fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions
and extraordinary expenses).
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the three years after the expense was waived/reimbursed only if Total Annual Fund Operating
Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the
time the expense was waived/reimbursed. This agreement may be terminated or revised at any time with the
consent of the Board of Trustees.
Example - This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The
Summary Prospectus
1
Direxion Daily NVDA Bull 2X Shares
example also assumes that
your investment has a 5% return each year and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| 1 Year |
3 Years |
5 Years |
10 Years |
| $106 |
$530 |
$980 |
$2,231 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or
“turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which
are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s
performance. The Fund’s portfolio turnover rate was 114% of the average value of its portfolio for the fiscal period from the Fund’s inception on September 13, 2023
through October 31, 2023. However, this portfolio turnover rate is calculated without regard to cash
instruments or derivative transactions. If the Fund's extensive use of derivatives was reflected, the
Fund's portfolio turnover rate would be significantly higher.
Principal Investment Strategy
The Fund, under normal circumstances, invests at least 80% of its net assets (plus any borrowings for
investment purposes) in the securities of NVDA and financial instruments, such as swap agreements and
options, that, in combination, provide 2X daily leveraged exposure to NVDA, consistent with the
Fund’s investment objective. The financial instrument in which the Fund most commonly invests is swap agreements which are intended to produce economically leveraged investment results.
The Fund will enter into one or more swap agreements with major global financial institutions whereby the Fund and the global financial institution will agree to exchange the
return earned on an investment by the Fund in NVDA that is equal, on a daily basis, to 200% of the value
of the Fund's net assets. The Adviser attempts to consistently apply leverage to obtain NVDA exposure for
the Fund equal to 200% of the value of its net assets and expects to rebalance the Fund’s holdings
daily to maintain such exposure. As a result of its investment strategies, the Fund will be concentrated in the industry to which NVDA is assigned (i.e., hold 25% or more of its total assets in investments that provide leveraged exposure in the industry to which NVDA is assigned).
The Fund will attempt to achieve its investment objective without regard to overall market movement or the increase or decrease of the value of NVDA. At the close of the
markets each trading day, the Adviser rebalances the Fund’s portfolio so that its exposure to NVDA
is consistent with the Fund’s investment objective. The impact of NVDA’s price movements
during the day will affect whether the Fund’s portfolio needs to be rebalanced. For example, if the
price of NVDA has risen on a given day, net assets of the Fund should rise, meaning that the Fund’s
exposure will need to be increased. Conversely, if the price of NVDA has fallen on a given day, net
assets of the Fund should fall, meaning the Fund’s exposure will need to be reduced. This daily rebalancing typically results in high portfolio turnover. On a day-to-day
basis, the Fund is expected to hold money market funds, deposit accounts with institutions with high quality (investment grade) credit ratings, and/or short-term debt instruments that have terms-to-maturity of less than 397 days and exhibit high quality (investment grade) credit
profiles, including U.S. government securities and repurchase agreements. The Fund may lend securities
representing up to one-third of the value of the Fund’s total assets (including the value of the
collateral received).
Generally, the Fund pursues its
investment objective regardless of market conditions and does not generally take defensive positions. If
the Fund’s underlying security moves more than 50% on a given trading day in a direction adverse to the Fund, the Fund’s investors would lose all of their money. The Adviser will attempt to position the Fund’s
portfolio to ensure that the Fund does not gain or lose more than 90% of its net asset value on a given
trading day. As a consequence, the Fund’s portfolio should not be responsive to underlying security
movements beyond 50% on a given trading day, whether that movement is favorable or adverse to the Fund.
Taking a temporary defensive position may result in the Fund not achieving its investment objective.
The terms “daily,” “day,” and
“trading day,” refer to the period from the close of the markets on one trading day to the
close of the markets on the next trading day. The Fund is “non-diversified,” under the Investment Company Act of 1940, as amended. Additionally, the Fund’s investment objective is not a fundamental policy and may be
changed by the Fund’s Board of Trustees without shareholder approval.
NVIDIA Corporation operates as a visual computing company worldwide.
It operates in two segments, graphics and compute & networking. NVDA is registered under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Information provided to or
filed with the Securities and Exchange Commission by NVIDIA Corporation pursuant to the Exchange Act can
be located by reference to the Securities and Exchange Commission file number 000-23985 through the
Securities and Exchange Commission’s website at www.sec.gov. In addition, information regarding NVIDIA Corporation may be obtained from other sources including, but not limited to, press releases, newspaper articles and
other publicly disseminated documents. As of December 31, 2023, NVDA is assigned to the technology
sector and the semiconductor industry.
The Fund has derived all disclosures contained in this document
regarding NVIDIA Corporation from the publicly available documents described above. Neither the Fund, the Trust, the Adviser nor any affiliate has participated in the preparation of such
documents. Neither the Fund, the Trust, the Adviser nor any affiliate makes any representation that such publicly available documents or any other publicly available information
regarding NVIDIA Corporation is accurate or complete. Furthermore, the Fund cannot give any assurance that all events occurring prior to the date of the prospectus
(including events that would affect the accuracy or completeness of the publicly available documents described above) that would affect the trading price of NVDA have been publicly
disclosed. Subsequent disclosure of any such events or the disclosure of, or failure to disclose,
Summary Prospectus
2
Direxion Daily NVDA Bull 2X Shares
material
future events concerning NVIDIA Corporation could affect the value of the Fund’s investments with respect to NVDA and therefore the value of the Fund.
Because of daily rebalancing and the compounding
of each day’s return over time, the return of the Fund for periods
longer than a single day will be the result of each day’s returns
compounded over the period, which will very likely differ from 200% of the return of the underlying security over the same period. The Fund will lose money if the underlying security
performance is flat over time, and as a result of daily rebalancing, the underlying security’s volatility and the effects of compounding, it is even possible that the Fund will lose money
over time while the underlying security’s performance increases over a period longer than a single day.
Principal Investment Risks
An investment in the Fund entails risk. The Fund may not achieve its leveraged investment objective and there is a risk that you could lose all of your money invested in the
Fund. The Fund is not a complete investment program. In addition, the Fund presents risks not traditionally associated with other mutual funds and ETFs. It is important that
investors closely review all of the risks listed below and understand them before making an investment in
the Fund.
Effects of Compounding and Market Volatility Risk — The Fund’s performance for periods greater than a trading
day will be the result of each day's returns compounded over the period, which is likely to differ from
200% of NVDA’s performance, before fees and expenses. Compounding has a significant impact on funds
that are leveraged and that rebalance daily. The impact of compounding becomes more pronounced as
volatility and holding periods increase and will impact each shareholder differently depending on the
period of time an investment in the Fund is held and the volatility of NVDA during the
shareholder’s holding period of an investment in the Fund.
Fund performance for periods greater than one single day
can be estimated given any set of assumptions for the following factors: a) volatility; b) performance;
c) period of time; d) financing rates associated with leveraged exposure; e) other Fund expenses; and f)
dividends or interest paid with respect to securities of NVDA. The chart below provides examples of how
volatility and its return could affect the Fund’s performance. The chart shows estimated Fund returns
for a number of combinations of volatility and performance over a one-year period. Performance shown in
the chart assumes that: (i) no dividends were paid with respect to the securities; (ii) there were no
Fund expenses; and (iii) borrowing/lending rates (to obtain leveraged exposure) of 0%. If Fund expenses
and/or actual borrowing/lending rates were reflected, the estimated returns would be different than those
shown. Particularly during periods of higher volatility, compounding will cause results for periods longer
than a trading day to vary from 200% of the performance of NVDA.
As shown in the chart below, the Fund would be expected to lose 6.1% if NVDA provided no return over a
one year period during which NVDA experienced annualized volatility of 25%. At higher ranges of
volatility, there is a chance of
a significant loss of value in the Fund, even if NVDA’s return is flat. For instance, if NVDA’s annualized volatility is 100%, the Fund would be
expected to lose 63.2% of its value, even if the cumulative return for the year was 0%.
Areas shaded red (or dark gray) represent those scenarios where the Fund can be expected to return less
than 200% of the performance of NVDA and those shaded green (or light gray) represent those scenarios
where the Fund can be expected to return more than 200% of the performance of NVDA. The table below is
not a representation of the Fund’s actual returns, which may be significantly better or worse than
the returns shown below as a result of any of the factors discussed above or in “Daily Correlation Risk” below.
| One
Year |
200%
One
Year |
Volatility Rate | ||||
| Return |
Return |
10% |
25% |
50% |
75% |
100% |
| -60% |
-120% |
-84.2% |
-85.0% |
-87.5% |
-90.9% |
-94.1% |
| -50% |
-100% |
-75.2% |
-76.5% |
-80.5% |
-85.8% |
-90.8% |
| -40% |
-80% |
-64.4% |
-66.2% |
-72.0% |
-79.5% |
-86.8% |
| -30% |
-60% |
-51.5% |
-54.0% |
-61.8% |
-72.1% |
-82.0% |
| -20% |
-40% |
-36.6% |
-39.9% |
-50.2% |
-63.5% |
-76.5% |
| -10% |
-20% |
-19.8% |
-23.9% |
-36.9% |
-53.8% |
-70.2% |
| 0% |
0% |
-1.0% |
-6.1% |
-22.1% |
-43.0% |
-63.2% |
| 10% |
20% |
19.8% |
13.7% |
-5.8% |
-31.1% |
-55.5% |
| 20% |
40% |
42.6% |
35.3% |
12.1% |
-18.0% |
-47.0% |
| 30% |
60% |
67.3% |
58.8% |
31.6% |
-3.7% |
-37.8% |
| 40% |
80% |
94.0% |
84.1% |
52.6% |
11.7% |
-27.9% |
| 50% |
100% |
122.8% |
111.4% |
75.2% |
28.2% |
-17.2% |
| 60% |
120% |
153.5% |
140.5% |
99.4% |
45.9% |
-5.8% |
NVDA’s annualized historical volatility rate for the five year period ended December 31, 2023 was
50.57%. NVDA’s highest volatility rate for any one calendar year during the five year period was
62.06% and volatility for a shorter period of time may have been substantially higher. NVDA’s annualized performance for the five-year period ended December 31, 2023 was 71.47%. Historical volatility and performance are not indications of what NVDA volatility and performance will be in the future.
For information regarding the effects of volatility and performance
on the long-term performance of the Fund, see “Additional Information Regarding Investment Techniques and Policies” in the Fund’s statutory prospectus, and
"Leverage - Special Note Regarding the Correlation Risks of the Funds" in the Fund’s Statement of Additional Information.
Leverage Risk
— The Fund obtains
investment exposure in excess of its net assets by utilizing leverage and may lose more money in market
conditions that are adverse to its investment objective than a fund that does not utilize leverage. An
investment in the Fund is exposed to the risk that a decline in the daily performance of NVDA will be
magnified. This means that an investment in the Fund will be reduced by an amount equal to 2% for every
1% daily decline in NVDA, not including the costs of financing leverage and other operating expenses,
which would further reduce its value. The Fund could lose an amount greater than its net assets in the
event of a security decline of more than 50%. This would result in a total loss of a shareholder’s
Summary Prospectus
3
Direxion Daily NVDA Bull 2X Shares
investment in one day even
if NVDA subsequently moves in the opposite direction and eliminates all or a portion of its earlier daily
change. A total loss may occur in a single day even if NVDA does not lose all of its value. Leverage will
also have the effect of magnifying any differences in the Fund’s correlation with NVDA and may increase the volatility of the Fund.
Under market circumstances that cause leverage to be expensive or unavailable, the Fund may increase its transaction fee, change its investment objective, reduce its
leverage or close.
Derivatives Risk
— Derivatives are
financial instruments that derive value from the underlying reference asset or assets, such as stocks,
bonds, or funds (including ETFs), interest rates or indexes. Investing in derivatives may be considered
aggressive and may expose the Fund to greater risks, and may result in larger losses or smaller gains,
than investing directly in the reference assets underlying those derivatives, which may prevent the Fund
from achieving its investment objective.
The Fund’s investments in derivatives may pose risks in
addition to, and greater than, those associated with directly investing in securities or other
investments, including risk related to the market, leverage, imperfect correlations with underlying
investments or the Fund’s other portfolio holdings, higher price volatility, lack of availability,
counterparty, liquidity, valuation and legal restrictions. The performance of a derivative may not track
the performance of its reference asset for various reasons, including due to fees and other costs
associated with it.
Because derivatives often require only a limited initial investment, the use of derivatives may expose
the Fund to losses in excess of the amount initially invested. As a result, the value of an investment in
the Fund may change quickly and without warning. If NVDA has a dramatic intraday increase or decrease
that causes a material change in the Fund’s net assets, the terms of a swap agreement between the
Fund and its counterparty may permit the counterparty to immediately close the swap agreement with the Fund. In that event, the Fund may not be able to enter into another swap agreement or invest in other derivatives to achieve
its investment objective. This may occur even if NVDA reverses all or a portion of its intraday movement
by the end of the day.
Upon entering into certain derivatives contracts, such as swap agreements, and to maintain open positions in such agreements, the Fund may be required to post collateral,
the amount of which may vary. As such, the Fund may maintain cash balances, which may be significant,
with service providers such as the Fund’s custodian or its affiliates in segregated accounts.
Maintaining larger cash and cash equivalent positions may also subject the Fund to additional risks, such
as increased credit risk with respect to the custodian bank holding the assets and the risk that a counterparty may be unable or unwilling to honor its obligations.
Counterparty Risk — If a counterparty is unwilling or unable
to make timely payments to meet its contractual obligations or fails to return holdings that are subject
to the agreement
with the counterparty resulting in the Fund losing money or not being able to meet its daily leveraged
investment objective.
In addition, because the Fund may enter into swap agreements with a limited number of counterparties, this increases the Fund’s exposure to counterparty credit
risk. Further, there is a risk that no suitable counterparties will be willing to enter into, or continue
to enter into, transactions with the Fund and, as a result, the Fund may not be able to achieve its
leveraged investment objective or rebalance properly, which may result in significant losses to the Fund,
or the Fund may decide to change its leveraged investment objective. The risk that no suitable
counterparties will enter into or continue to provide swap exposure to the Fund may be increased when
there is significant market volatility.
Rebalancing Risk — If for any reason the Fund is unable
to rebalance all or a part of its portfolio, or if all or a portion of the portfolio is rebalanced
incorrectly, the Fund’s investment exposure may not be consistent with its investment objective
which may lead to greater losses or reduced gains. In these instances, the Fund may have investment exposure to NVDA that is significantly greater or significantly less than its stated investment objective. Additionally, the
Fund may close to purchases and sales of Shares prior to the close of trading on the Nasdaq or other
national securities listing exchanges where Shares are listed and incur significant losses.
Intra-Day Investment
Risk— The intra-day performance of Fund shares traded in the secondary market will be different from the performance of the Fund when measured from
the close of the market on a given trading day until the close of the market on the subsequent trading
day. An investor that purchases shares intra-day may experience performance that is greater than, or less
than, the Fund’s stated investment objective.
If there is a significant intra-day market event and/or the
securities experience a significant change in value, the Fund may not meet its investment objective, be
unable to rebalance its portfolio appropriately, or may experience significant premiums or discounts, or
widened bid-ask spreads.
Daily Correlation Risk - There is no guarantee that the Fund will achieve a high degree of correlation to NVDA and therefore achieve its daily leveraged investment objective.
The Fund’s exposure to NVDA is impacted by NVDA’s movement. Because of this, it is unlikely
that the Fund will be perfectly exposed to NVDA at the end of each day. The possibility of the Fund being
materially over- or under-exposed to NVDA increases on days when NVDA is volatile near the close of the
trading day. Market disruptions, regulatory restrictions and high volatility will also adversely affect the
Fund’s ability to adjust exposure to the required levels.
The Fund may have difficulty achieving its daily leveraged investment objective for many reasons, including fees, expenses, transaction costs, financing costs related to the
use of derivatives, accounting standards and their application to income items, disruptions, illiquid or
high volatility in the markets for the securities or financial instruments in which the Fund invests,
early and unanticipated closings of the markets on which the holdings of the Fund trade,
Summary Prospectus
4
Direxion Daily NVDA Bull 2X Shares
resulting in the inability
of the Fund to execute intended portfolio transactions, regulatory and tax considerations, which may
cause the Fund to hold (or not to hold) NVDA. The Fund may take or refrain from taking positions in order
to improve tax efficiency, comply with regulatory restrictions, or for other reasons, each of which may
negatively affect the Fund’s desired correlation with NVDA. The Fund may be subject to large
movements of assets into and out of the Fund, potentially resulting in the Fund being over- or
under-exposed to NVDA. Additionally, the Fund’s underlying investments and/or reference assets may
trade on markets that may not be open on the same day as the Fund, which may cause a difference between
the changes in the daily performance of the Fund and changes in the performance of NVDA. Any of these
factors could decrease the correlation between the performance of the Fund and NVDA and may hinder the
Fund’s ability to meet its daily leveraged investment objective on or around that day.
Market Risk
— The Fund’s investments are subject
to changes in general economic conditions, general market fluctuations and the risks inherent in
investment in securities markets. Investment markets can be volatile and prices of investments can change
substantially due to various factors including, but not limited to, economic growth or recession, changes
in interest rates, changes in the actual or perceived creditworthiness of issuers, general market
liquidity, exchange trading suspensions and closures, geopolitical events, natural disasters, and public
health risks. Interest rates and inflation rates may change frequently and drastically due to various
factors and the Fund’s investments may be adversely impacted.
Indirect Investment Risk — NVIDIA Corporation is not affiliated with the Trust, the Adviser or any affiliates thereof and is not involved with this offering in any way,
and has no obligation to consider the Fund in taking any corporate actions that might affect the value of
the Fund. The Trust, the Fund and any affiliate are not responsible for the performance of NVDA and make
no representation as to the performance of NVDA. Investing in the Fund is not equivalent to investing in
NVDA. Fund shareholders will not have voting rights or rights to receive dividends or other distributions
or any other rights with respect to NVDA.
NVIDIA Corporation Investing Risk — Issuer-specific attributes may cause an investment held by the Fund to be more volatile than the market generally. The value of an individual
security or particular type of security may be more volatile than the market as a whole and may perform
differently from the value of the market as a whole. As of the date of this prospectus, in addition to
the risks associated with companies in the technology sector and the semiconductor industry, NVIDIA
Corporation faces risks associated with: failure to meet the evolving needs of its large markets – gaming, data center, professional visualization and automotive – and identifying new products, services and technologies; competition; changes in customer demand; supply chain issues; manufacturing delays; potential significant mismatches
between supply and demand giving rise to product shortages or excessive inventory; the dependence on
third-parties and their technology to manufacture, assemble, test, or package its products which reduces
control over product quantity
and quality, manufacturing yields, development, enhancement and product delivery schedules; significant
product defects; international sales and operations, including adverse economic conditions; impacts from
climate change, including water and energy availability; inability to realize the potential benefits from
business investments and acquisitions; concentration of revenue from a limited number of partners,
distributors and customers; the ability to attract, retain and motivate executives and key employees; system security and data protection breaches, including cyberattacks; business disruptions; the proper function of its
business processes and information systems; fluctuations in operating results; increased scrutiny from
shareholders and regulators regarding its environmental, social and governance responsibilities could
result in increased operating expenses or adversely impact its reputation or ability to attract customers
or suppliers; issues related to the responsible use of artificial intelligence (AI); ability to protect its intellectual property; ever changing and increasingly stringent data privacy and security laws and regulations; as well as other
regulatory, tax related and legal issues, including the changing regulations regarding AI.
Security Volatility Risk
— The performance of the
Fund is designed to correlate to the performance of NVIDIA Corporation. Significant short-term price
movements in NVIDIA Corporation, could adversely impact the performance of both NVDA and the Fund,
increase the Fund’s bid-ask spread and adversely impact the Fund’s ability to achieve its
investment objective. In addition, the net asset value of the Fund over short-term periods may be more volatile than other investment options due to the volatility of underlying security.
Industry Concentration Risk
— The Fund will be
concentrated in the industry to which NVDA is assigned (i.e., hold more than 25% of its total assets in investments that provide leveraged exposure to the industry to which NVDA is assigned). A portfolio concentrated in a particular industry
may present more risks than a portfolio broadly diversified over several industries.
Artificial Intelligence (AI) and Big Data
Company Risk — Companies engaged in artificial intelligence
(“AI”) and big data typically face intense competition and potentially rapid product
obsolescence. These companies are also heavily dependent on intellectual property rights and may be
adversely affected by loss or impairment of those rights. There can be no assurance these companies will
be able to successfully protect their intellectual property to prevent the misappropriation of their
technology, or that competitors will not develop technology that is substantially similar or superior to
such companies’ technology. AI and big data companies typically engage in significant amounts of spending on research and development, as well as mergers and acquisitions, and there is no guarantee that the products or services produced by these companies will be successful. AI and big data companies are potential targets for
cyberattacks, which can have a materially adverse impact on the performance of these companies. In
addition, AI technology could face increasing regulatory scrutiny in the future, which may limit the
development of this technology
Summary Prospectus
5
Direxion Daily NVDA Bull 2X Shares
and impede the growth of
companies that develop and/or utilize this technology. Similarly, the collection of data from consumers
and other sources could face increased scrutiny as regulators consider how the data is collected, stored,
safeguarded and used. AI and big data companies may face regulatory fines and penalties, including forced
break-ups, that could hinder the ability of the companies to operate on an ongoing basis. The customers
and/or suppliers of AI and big data companies may be concentrated in a particular country, region or
industry. Any adverse event affecting one of these countries, regions or industries could have a negative
impact on AI and big data companies. Country, government, and/or region-specific regulations or restrictions could have an impact on AI and big data companies.
Technology Sector Risk — The market prices of
technology-related securities tend to exhibit a greater degree of market risk and sharp price
fluctuations than other types of securities. These securities may fall in and out of favor with investors
rapidly, which may cause sudden selling and dramatically lower market prices. Technology securities may
be affected by intense competition, obsolescence of existing technology, general economic conditions and
government regulation and may have limited product lines, markets, financial resources or personnel.
Technology companies may experience dramatic and often unpredictable changes in growth rates and
competition for qualified personnel. These companies are also heavily dependent on patent and intellectual property rights, the loss or impairment of which may adversely impact a company’s profitability. A small number of
companies represent a large portion of the technology industry. In addition, a rising interest rate
environment tends to negatively affect technology companies, because those technology companies seeking
to finance expansion would have increased borrowing costs, which may negatively impact earnings.
Technology companies having high market valuations may appear less attractive to investors, which may
cause sharp decreases in their market prices. Companies in the application software industry, in
particular, may also be negatively affected by the risk that subscription renewal rates for their
products and services decline or fluctuate, leading to declining revenues. Companies in the systems
software industry may be adversely affected by, among other things, actual or perceived security
vulnerabilities in their products and services, which may result in individual or class action lawsuits, state or federal enforcement actions and other remediation costs. Companies in the computer software industry may also be
affected by the availability and price of computer software technology components.
Semiconductor Industry
Risk– Semiconductor companies may face intense competition, both domestically and internationally, and such competition may have an adverse effect on their profit margins. Semiconductor companies may have limited product lines, markets, financial resources
or personnel. Semiconductor companies’ supply chain and operations are dependent on the
availability of materials that meet exacting standards and the use of third parties to provide components
and services. Semiconductor companies may rely on a limited number of suppliers, or upon suppliers in a
single location, for certain materials, equipment or tools. Finding and qualifying alternate or
additional suppliers can be
a lengthy process that can cause production delays or impose unforeseen costs, and such alternatives may
not be available at all. Production can be disrupted by the unavailability of resources, such as water,
silicon, electricity, gases and other materials. Suppliers may also increase prices or encounter
cybersecurity or other issues that can disrupt production or increase production costs. The products of
semiconductor companies may face obsolescence due to rapid technological developments and frequent new
product introduction, unpredictable changes in growth rates and competition for the services of qualified
personnel. Capital equipment expenditures could be substantial, and equipment generally suffers from
rapid obsolescence. Companies in the semiconductor industry are heavily dependent on patent and
intellectual property rights. The loss or impairment of these rights would adversely affect the
profitability of these companies.
Money Market Instrument Risk — The Fund may use a variety of money market instruments for cash management purposes, including money market funds, depositary accounts
and repurchase agreements. Money market funds may be subject to credit risk with respect to the debt
instruments in which they invest. Depository accounts may be subject to credit risk with respect to the
financial institution in which the depository account is held. Money market instruments may lose
money.
Large-Capitalization Company Risk — Large-capitalization companies typically have significant financial resources, extensive product lines and broad markets for their goods
and/or services. However, they may be less able to adapt to changing market conditions or to respond
quickly to competitive challenges or to changes in business, product, financial, or market conditions and
may not be able to maintain growth at rates that may be achieved by well-managed smaller and mid-size
companies, which may affect the companies’ returns.
Liquidity Risk — Holdings of the Fund may be difficult
to buy or sell or may be illiquid, particularly during times of market turmoil. There is no assurance
that a security or derivative instrument that is deemed liquid when purchased will continue to be liquid.
Illiquid securities may be difficult to value, especially in changing or volatile markets. If the Fund is
forced to buy or sell an illiquid security or derivative instrument at an unfavorable time or price, the Fund may be adversely impacted. Certain market conditions or restrictions may prevent the Fund from limiting losses, realizing gains or achieving its investment objective. In certain market conditions the Fund may be one of many market
participants that is attempting to transact in the underlying security. Under such circumstances, the
market for the underlying security may lack sufficient liquidity for all market participants' trades.
Therefore, the Fund may have more difficulty transacting in the securities or financial instruments and
the Fund's transactions could exacerbate illiquidity and price volatility.
To the extent that the instruments utilized
by the Fund are thinly traded or have a limited market, the Fund may be unable to meet its investment
objective due to a lack of available investments or counterparties. During such periods,
Summary Prospectus
6
Direxion Daily NVDA Bull 2X Shares
the Fund’s ability to
issue additional Creation Units may be adversely affected. As a result, the Fund’s shares could
trade at a premium or discount to their net asset value and/or the bid-ask spread of the Fund’s
shares could widen. Under such circumstances, the Fund may be unable to rebalance its exposure properly
which may result in significantly more or less exposure and losses to the Fund. In such an instance, the
Fund may increase its transaction fee, change its investment objective, reduce its exposure or close.
Early Close/Trading Halt Risk
— An exchange or market may close or issue trading halts on specific securities or financial instruments. Under such circumstances, the Fund
may be unable to buy or sell certain portfolio securities or financial instruments, may be unable to
rebalance its portfolio, may be unable to accurately price its investments, and may disrupt the
Fund’s creation/redemption process which means the Fund may be unable to achieve its investment objective and it may incur substantial losses.
Equity Securities Risk — Publicly issued equity securities, including common stocks, are subject to market risks that may cause their prices to fluctuate over time. Fluctuations
in the value of equity securities in which the Fund invests, and/or has exposure to, will cause the net
asset value of the Fund to fluctuate.
Cash Transaction Risk— At certain times, the Fund may
effect creations and redemptions for cash rather than for in-kind securities. As a result, the Fund may
not be tax efficient and may incur brokerage and financing costs related to buying and selling securities
or obtaining derivative exposure to achieve its investment objective thus incurring additional expenses
than if it had effected creations and redemptions in kind. To the extent that such costs are not offset by
transaction fees paid by an authorized participant, the Fund may bear such costs, which will decrease the
Fund’s net asset value.
High Portfolio Turnover Risk— Daily rebalancing of the Fund’s holdings pursuant to its daily investment objective causes a much greater number of portfolio
transactions when compared to most ETFs. Additionally, active secondary market trading of the Shares
could cause more frequent creation and redemption activities, which would increase the number of
portfolio transactions. High levels of portfolio transactions may cause higher transaction costs because of increased broker commissions resulting from such transactions and increased taxable capital gains. The Fund calculates portfolio
turnover without including the short-term cash instruments or derivative transactions that comprise most
of the Fund’s trading. As such, if the Fund’s extensive use of derivative instruments were
reflected, the calculated portfolio turnover rate would be significantly higher.
Tax Risk — In order to qualify for the special
tax treatment accorded a regulated investment company (“RIC”) and its shareholders, the Fund
must derive at least 90% of its gross income for each taxable year from “qualifying income,”
meet certain asset diversification tests at the end of each taxable quarter, and meet annual distribution
requirements. The Fund’s pursuit of its investment strategy will potentially be limited by the
Fund’s intention to qualify for such treatment and could adversely affect the Fund’s ability to so qualify.
The Fund may make certain
investments, the treatment of which for these purposes is unclear. If, in any year, the Fund were to fail
to qualify for the special tax treatment accorded a RIC and its shareholders, and were ineligible to or were not able to cure such failure, the Fund would be taxed in the same manner as an ordinary corporation subject to U.S.
federal income tax on all its income at the fund level. The resulting taxes could substantially reduce
the Fund’s net assets and the amount of income available for distribution. In addition, in order to
requalify for taxation as a RIC, the Fund could be required to recognize unrealized gains, pay
substantial taxes and interest, and make certain distributions. Please see the section entitled
“Dividends, Other Distributions and Taxes” in the Statement of Additional Information for
more information.
Non-Diversification Risk — The Fund has the ability to invest a relatively high percentage of its assets in the securities of a small number of issuers or in financial instruments
with a single counterparty or a few counterparties. This may increase the Fund’s volatility and
increase the risk that the Fund’s performance will decline based on the performance of a single
issuer, the credit of a single counterparty, and/or a single economic, political or regulatory event.
Securities Lending Risk— Securities lending involves the
risk that the Fund may lose money because the borrower of the loaned securities fails to return the
securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the
value of collateral provided for loaned securities, a decline in the value of any investments made with
cash collateral, or a “gap” between the return on cash collateral reinvestments and any fees the Fund has agreed to pay a borrower. These events could also trigger adverse tax consequences for the Fund.
Special Risks of Exchange-Traded
Funds
Authorized Participants Concentration Risk. The Fund may have a limited number of financial institutions that may act as Authorized Participants. To the extent that those Authorized Participants exit the business or are unable to
process creation and/or redemption orders, Shares may trade at larger bid-ask spreads and/or premiums or
discounts to net asset value. Authorized Participant concentration risk may be heightened for a fund that
invests in non-U.S. securities or other securities or instruments that have lower trading
volumes.
Absence of Active Market Risk.
Although Shares are listed for trading on a stock exchange, there is no assurance that an active trading
market for them will develop or be maintained. In the absence of an active trading market for Shares,
they will likely trade with a wider bid/ask spread and at a greater premium or discount to net asset value.
Market Price Variance
Risk. Fund Shares can be bought and sold in the secondary market at market prices, which may be higher or lower than the net asset value of the Fund. When Shares trade at a price greater than net asset value,
they are said to trade at a “premium.” When they trade at a price less than net asset value,
they are said to trade at a “discount.” The market price of Shares fluctuates based on
changes in the value of the Fund’s holdings, the supply
Summary Prospectus
7
Direxion Daily NVDA Bull 2X Shares
and demand for Shares and
other market factors. The market price of Shares may vary significantly from the Fund’s net asset
value especially during times of market volatility or stress. Further, to the extent that exchange specialists, market makers, Authorized Participants, or other market participants are unavailable or unable to trade the Fund’s
Shares and/or create or redeem Creation Units premiums or discounts may increase.
Trading Cost Risk. When buying or selling Shares in the secondary market, a buyer may incur brokerage commission or other charges. In addition, a buyer may incur the cost
of the “spread” also known as the bid-ask spread, which is the difference between what
investors are willing to pay for Fund shares (the “bid” price) and the price at which they
are willing to sell Fund shares (the “ask” price). The bid-ask spread varies over time based on, among other things, trading volume, market liquidity and market volatility. Because of the costs inherent in buying or selling Fund
shares, frequent trading may detract significantly from investment results.
Exchange Trading Risk. Shares are listed for trading on the Nasdaq. They also may be listed or traded on other U.S. and non-U.S. stock exchanges and may trade on electronic communication networks. Trading in Shares on their listing
exchange may be halted due to market conditions or for reasons that, in the view of the exchange, make
trading in Shares inadvisable, including if they fail to meet the listing requirements of the exchange.
Under certain circumstances, Shares may even be delisted. Trading halts of Shares should be expected to
disrupt the Fund’s creation/redemption process and may temporarily prevent investors from buying and
selling Shares. Like other listed securities, Shares of the Fund may be sold short, and short positions
in Shares may place downward pressure on their market price.
Fund Performance
No prior investment performance is provided for the Fund because it does not have annual returns for at least one full calendar year prior to the date of this
Prospectus. Updated performance will be available on the Fund’s website at www.direxion.com/etfs?producttab=performance or by calling the Fund toll-free at (866)
476-7523.
Management
Investment Adviser. Rafferty Asset Management, LLC is the Fund’s investment adviser.
Portfolio Managers. The following members of Rafferty’s investment team are jointly and primarily responsible for the day-to-day management of the Fund:
| Portfolio Managers |
Years of Service
with the Fund |
Primary Title |
| Paul Brigandi |
Since Inception in September
2023 |
Portfolio Manager |
| Tony Ng |
Since Inception in September
2023 |
Portfolio Manager |
Purchase and Sale of Fund Shares
The Fund’s individual shares may only be purchased or sold in the secondary market through a
broker-dealer or other financial intermediaries at market price rather than at net
asset value. The market
price of Shares will fluctuate in response to changes in the value of the Fund’s holdings and
supply and demand for the Shares, which may result in shareholders purchasing or selling the Shares on the
secondary market at a market price that is greater than net asset value (a premium) or less than net
asset value (a discount). A shareholder may incur costs attributable to the difference between the
highest price a buyer is willing to pay for the Fund’s Shares (bid) and the lowest price a seller
is willing to accept for the Fund’s Shares (ask) when buying or selling Shares on the secondary
market (the “bid-ask spread”) in addition to brokerage commissions. The bid-ask spread may
vary over time for Shares based on trading volume and market liquidity. Recent information regarding the Fund Shares such as net asset value, market price, premiums and discounts and bid-ask spreads and related other information
is available on the Fund’s website, www.direxion.com/etfs?producttab=performance.
The Fund’s shares are not individually redeemable by the
Fund. The Fund will issue and redeem Shares only to Authorized Participants in exchange for cash or a
deposit or delivery of a basket of assets (securities and/or cash) in large blocks, known as creation
units, each of which is comprised of 25,000 Shares.
Tax Information
The Fund intends to make distributions that may be taxed as ordinary income or long-term capital gains. Those distributions will be subject to federal income tax and may
also be subject to state and local taxes, unless you are investing through a tax-deferred arrangement,
such as a 401(k) plan or an individual retirement account. Distributions or investments made through
tax-deferred arrangements may be taxed later upon withdrawal. Distributions by the Fund may be
significantly higher than those of most other ETFs.
Payments to
Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a
bank or financial adviser), the Fund and/or its Adviser may pay the intermediary for the sale of Fund
shares and related services. These payments may create a conflict of interest by influencing the
broker-dealer or other financial intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
Summary Prospectus
8
Direxion Daily NVDA Bull 2X Shares
SEC File Number: 811-22201