Form 497K Direxion Shares ETF Trus
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E-mail| Summary Prospectus |
May 27, 2026 |
| Direxion Shares ETF Trust |
|
Direxion Daily Silver Bull 2X ETF
| Ticker: USLV |
| Listed on: NYSE Arca, Inc. |
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 [email protected]. The Fund’s prospectus and statement of additional information, both dated April 29, 2026, are incorporated by reference into this Summary Prospectus.
Important Information Regarding the
Fund
The Direxion Daily Silver Bull 2X ETF (the
“Fund”) seeks daily leveraged investment results and is very different from 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 seek 200% of the daily performance of U.S.-listed exchange-traded products that attempt to reflect the price performance of silver before fees and expenses (each a "Reference ETP”
and collectively the "Reference ETPs"). The volatility of the Reference ETPs may affect the Fund’s return as much as, or more than, the return of the Reference ETPs. As a
result of volatility, the Fund may not behave as expected. The Fund is intended to be used by investors who intend to monitor their portfolios. An investment in the Fund is not a complete
investment program.
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 a Reference ETP’s performance is flat, and it is possible that the Fund will lose money even if a Reference ETP’s performance increases. An investor could lose the full principal value of his/her investment within a single day if a
Reference ETP 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 exchange-traded products that attempt to reflect the price performance of silver before fees and expenses. The Fund does not seek to achieve its stated investment objective for a period of time different than a trading day.The Fund does not invest directly in silver.
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)
|
0.22% |
| Acquired Fund Fees and Expenses(1)
|
0.15% |
| Total Annual Fund Operating Expenses |
1.12% |
| Expense Cap/Reimbursement(2)
|
-0.02% |
| Total Annual Fund Operating Expenses After Expense Cap/Reimbursement |
1.10% |
(1)
Estimated for the Fund's current fiscal year.
(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, 2027, 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 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 |
| $112 |
$354 |
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
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1
Direxion Daily Silver Bull 2X ETF
in Annual Fund Operating
Expenses or in the example, affect the Fund’s performance.
Principal Investment Strategy
The Fund, under normal circumstances, invests at least 80% of its net assets (plus
borrowing for investment purposes) in the economic equivalents of silver by investing in one or more Reference ETPs that invest directly in silver and financial instruments that
provide 200% daily exposure to the Reference ETPs. The financial instruments in which the Fund normally invests will include uncleared, cash-settled swap agreements, which are
intended to produce economically leveraged investment results.
The Fund intends to utilize the iShares Silver Trust as the initial Reference ETP, although the Fund may use other Reference ETPs. The Reference
ETPs only recently commenced operations and therefore have a limited operating history.
The Fund is “non-diversified,” meaning that a relatively
high percentage of its assets may be invested in a limited number of
issuers of securities or financial instruments. 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.
The Fund will invest up to 25% of its total assets in a
wholly owned and controlled subsidiary (the “Subsidiary”). The
Fund’s investment in the Subsidiary is expected to provide the Fund
with exposure to the Reference ETPs in a manner that is permitted by the federal tax laws, which limit the ability of investment companies such as the Fund to invest directly in such instruments.
In addition to investing in the Subsidiary, the Fund will invest directly and indirectly (through the Subsidiary) in commodity futures and swap contracts, as well as certain short-term
fixed-income investments certain of which are intended to serve as margin or collateral for the Subsidiary’s commodity futures positions. The Adviser will use its discretion
to determine how much of the Fund’s total assets to invest in the Subsidiary, however, the Fund’s investment in the Subsidiary may not exceed 25% of the value of its total assets at the
end of each quarter of its taxable year, except in certain circumstances. The Subsidiary is a limited partnership operating under Cayman Islands law and is wholly-owned and
controlled by the Fund and is advised by the Adviser. The Subsidiary has the same investment objective as the Fund and will follow the same general investment policies
and restrictions. Except as noted, for purposes of this Prospectus, references to the Fund’s investment strategies and risks include those of its Subsidiary.
The Commodity Futures Trading Commission (the “CFTC”) has adopted certain
requirements that subject registered investment companies and their advisors to regulation by the CFTC if a registered investment company invests more than a prescribed level of its
net assets in CFTC-regulated futures, options and swaps, or if a registered investment company markets itself as providing investment exposure to such instruments. Due to the
Fund’s use of CFTC-regulated futures and swaps above the prescribed levels, it is considered a “commodity pool” under the Commodity Exchange Act.
The Fund seeks to remain fully invested at all times, consistent with its stated
investment objective, but may not always
have investment exposure to the Reference ETPs. In all cases, the investments would be
designed to provide exposure to the Reference ETPs. In certain circumstances, for example, if the Fund is unable to obtain the desired exposure to the Reference ETPs using swap
agreements, the Fund may obtain such exposure through standardized, cash-settled bitcoin futures contracts traded on commodity exchanges registered with the CFTC. In such
circumstances, the Fund intends to invest in cash-settled, front-month bitcoin futures, but may also invest in back-month, cash-settled bitcoin futures contracts. Front-month bitcoin
futures contracts are those contracts with the shortest time to maturity. Back-month bitcoin futures contracts are those with longer times to maturity.
The initial Reference ETP is registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The iShares Silver
Trust is subject to the information requirements of the Exchange Act and files reports and other information with the Securities and Exchange Commission (“SEC”). Such
information provided to or filed with the SEC can be located by reference to the SEC file numbers (001-32863 and 333-268747) through the SEC’s website at www.sec.gov. In addition, information
regarding iShares Silver Trust may be obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated documents. The
iShares Silver Trust is listed on NYSE Arca, Inc. (Ticker: SLV).
The Fund will attempt to achieve its investment objective without regard to overall market movement or the increase or decrease in the value of
the Reference ETPs. At the close of the markets each trading day, Rafferty rebalances the Fund’s portfolio so that its exposure to the Reference ETPs is consistent with the
Fund’s investment objective. The impact of a Reference ETP’s movements during the day will affect whether the Fund’s portfolio needs to be re-positioned. For example, if a
Reference ETP 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 Reference ETPs have fallen on a
given day, net assets of the Fund should fall, meaning the Fund’s exposure will need to be reduced. This re-positioning strategy typically results in high portfolio
turnover. In addition, on a day-to-day basis, the Fund is expected to hold money market funds, deposit accounts with institutions with high quality credit ratings (i.e. investment grade or higher), and/or short-term debt instruments that have terms-to-maturity of less than 397 days and exhibit high quality
credit profiles, including U.S. government securities and repurchase agreements.
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,” meaning that a relatively high percentage of its assets may be invested in a limited number of issuers of securities. 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.
The Fund has derived all disclosures contained in
this document regarding the initial Reference ETP from the publicly available documents described above. Neither the
Summary Prospectus
2
Direxion Daily Silver Bull 2X ETF
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 the initial Reference ETP 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 a Reference ETP have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of, or failure to disclose, material future events concerning a Reference ETP could affect the value of the
Fund’s investments with respect to a Reference ETP 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 Reference ETPs over the same period. The Fund will lose money if the Reference ETP performance is flat over time, and as a result of daily rebalancing, a Reference ETP’s volatility and the effects of compounding, it is even possible that the Fund will lose
money over time while a Reference ETP’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, a Fund presents some risks not traditionally associated with most
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 a Reference ETP’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 a Reference ETP during the shareholder’s holding period.
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
a Reference ETP. 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. Actual Fund returns are expected to vary from these estimates. 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 a Reference ETP.
As shown in the chart below, the Fund would be expected to lose 6.1% if a Reference ETP
provided no return over a one year period during which a Reference ETP 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 a Reference ETP’s return is flat. For instance, if a Reference ETP’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 a Reference ETP 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
a Reference ETP. 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% |
The Reference ETP’s annualized historical volatility rate for the five year period
ended December 31, 2025 was 29.21%. The Reference ETP’s highest volatility rate for December 31, 2025 was 32.40% and volatility for a shorter period of time may have been
substantially higher. The Reference ETP’s annualized performance for the five-year period ended December 31, 2025 was 21.25%. Historical volatility and performance are not
indications of what a Reference ETP volatility and performance will be in the future.
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 typically results in the magnification of a decline
in the daily performance of a Reference ETP resulting in a larger loss being incurred than
Summary Prospectus
3
Direxion Daily Silver Bull 2X ETF
if there was no leverage
utilized. This means that an investment in the Fund will be reduced by an amount equal to 2% for every 1% daily decline in a Reference ETP, 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 Reference ETP decline
of more than 50% of a Reference ETP. This would result in a total loss of a shareholder’s investment in one day even if a Reference ETP subsequently reverses all or a portion of
its previous movement prior to the end of the day. A total loss of a shareholder’s investment in the Fund may occur in a single day even if a Reference ETP’s value does not
move fully opposite from the Fund’s investment objective. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with a Reference ETP and may
increase the volatility of the Fund.
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, 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 increase its transaction fee, change its investment
objective by, for example, seeking to track an alternative ETP, reduce its leverage or close.
Derivatives Risk — Derivatives are financial instruments
that derive value from the underlying reference asset or assets, such as
digital assets, stocks, bonds, 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. Swap
agreements are the type of derivatives traded by the Fund, although in certain
circumstances, the Fund may also invest in futures contracts.
The Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities, digital
assets or other ordinary investments, including risk related to the market, leverage, imperfect daily correlations with underlying investments or the Fund’s other portfolio
holdings, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions. The use of derivatives is a highly specialized activity that involves
investment techniques and risks different from those associated with ordinary portfolio securities transactions. The use of derivatives may result in larger losses or smaller gains than
directly investing in securities or digital assets. When the Fund uses derivatives, there may be imperfect correlation between the value of the reference assets and the derivative, which may
prevent the Fund from achieving its investment objective. Because derivatives often require only a limited initial investment, the use of derivatives may expose the Fund to losses
in excess of those amounts initially invested.
The primary risks associated with the use of swaps are mispricing or improper valuation, imperfect correlation
between movements of the notional value of a swap and the price of the reference asset, and the failure of a counterparty to perform. If a
swap counterparty’s creditworthiness for an “over-the-counter” swap declines, the value of the swap would also likely decline. There is no guarantee that the Fund
could eliminate its exposure under an outstanding swap by entering into offsetting swap
with the same or another party.
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, the Fund will lose money and/or not be able to meet its daily leveraged investment objective.
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. The risk that no suitable counterparties will enter
into or continue to provide swap exposure to the Fund may be heightened when there is significant volatility in the overall market or the reference asset.
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 selected as Reference ETPs experience a significant change in value, the Fund
may not meet its investment objective or may be unable to rebalance its portfolio appropriately, resulting in significant losses or reduced gains. In response to
significant intraday market volatility, among other actions, the Adviser may determine to trade a portion or all of the rebalance trade for the Fund prior to market close, which may result in
the Fund not achieving its investment objective. Additionally, the Fund’s Shares traded on the secondary market 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 a Reference ETP and therefore achieve its
daily leveraged investment objective. The Fund’s exposure to a Reference ETP is impacted by a Reference ETP’s movement. Because of this, it is unlikely that the Fund will
be perfectly exposed to a Reference ETP at the end of each day. The possibility of the Fund being materially over- or under-exposed to a Reference ETP increases on days when a Reference
ETP 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.
Summary Prospectus
4
Direxion Daily Silver Bull 2X ETF
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, 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) a Reference ETP. The Fund may be required to trade more frequently or may refrain from taking
certain positions to ensure compliance with regulatory restrictions or to ensure qualification as a registered investment company or to improve tax efficiency, or for
other reasons, each of which may negatively impact the Fund’s desired correlation with
a Reference ETP or increase its required distributions.
The derivative instruments or other investments the Fund utilizes to obtain exposure may not provide the expected correlation to a Reference ETP,
resulting in the Fund not performing as expected. 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 a Reference ETP. Any of these factors could decrease the correlation between the performance of the Fund and a Reference ETP and may hinder the
Fund’s ability to meet its daily leveraged investment objective on or around that
day.
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 a Reference ETP 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 NYSE Arca or other national securities listing exchanges where Shares are listed and incur significant losses.
Silver Risk - The price of silver may be volatile, and physical
silver-related exchange-traded products and derivatives may be highly
sensitive to the price of silver. The price of physical silver can be significantly affected by international monetary and political developments such as currency devaluation or revaluation, central bank
movements, economic and social conditions within a country, transactional or trade imbalances, or trade or currency restrictions between countries. physical silver has sales
commission, storage, insurance and auditing expenses.
Reference ETP Investment Risk— The Fund will invest in, or obtain exposure to, one or more exchange-traded
products to pursue its investment objective. When investing in an Reference
ETP, the Fund becomes a shareholder of that Reference ETP and as a result, Fund shareholders indirectly bear the Fund’s proportionate share of the fees and expenses of the Reference ETP
in addition to the fees and expenses of the Fund’s own operations. If the Reference ETP fails to
achieve its investment
objective or its shares trade at a significant premium or discount, the Fund’s performance will likely be adversely affected.
Other Investment Companies (including ETFs)
Risk— The Fund may invest in, or obtain exposure to, another investment company, including an
ETF or a money market fund (each, an “underlying fund”), to pursue its investment objective or manage cash. When investing in an underlying fund, the Fund becomes a
shareholder of that underlying fund and as a result, Fund shareholders indirectly bear the Fund’s proportionate share of the fees and expenses of the underlying fund, in
addition to the fees and expenses of the Fund’s own operations. If the underlying fund fails to achieve its investment objective the Fund’s performance will likely be adversely affected.
In addition, to the extent that the Fund invests in, or has exposure to, an underlying
fund that is an ETF, it will be exposed to all of the risks associated with the ETF structure. Shares of ETFs may trade at a discount or a premium to an ETF’s net asset value
which may result in an ETF’s market price being more or less than the value of the Reference ETP or ETPs especially during periods of market volatility or disruption. There may also
be additional trading costs due to an ETF’s bid-ask spread, and/or the underlying fund may suspend purchases or redemption of its shares due to market conditions that make it
impracticable to conduct such transactions, any of which may adversely affect the Fund. If an underlying fund’s shares are suspended from trading on an exchange,
the Fund may not be able to obtain the required exposure to meet its investment objective.
Non-Affiliation Risk — The Reference ETPs are not affiliated
with the Trust, the Adviser or any affiliates thereof and are not involved
with this offering in any way, and have 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 a Reference ETP and make no representation as to the performance of a Reference ETP. Investing in the Fund is not equivalent to
investing in a Reference ETP. Fund shareholders will not have voting rights or rights to receive dividends or other distributions or any other rights with respect to a Reference ETP.
Liquidity Risk — Holdings of the Fund may be difficult
to buy or sell or may be illiquid, particularly during times of market
turmoil. 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, such as market rules related to short sales, may prevent the Fund from limiting losses,
realizing gains or achieving a high correlation with a Reference ETP. There is no assurance that a security or derivative instrument that is deemed liquid when purchased will continue
to be liquid. Market illiquidity may cause losses for the Fund. To the extent that the value of a Reference ETP increases or decreases significantly, the Fund may be one of many
market participants that are attempting to transact in the Reference ETPs. Under such circumstances, the market for the Reference ETPs may lack
Summary Prospectus
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Direxion Daily Silver Bull 2X ETF
sufficient liquidity for
all market participants' trades. Therefore, the Fund may have more difficulty transacting in the Reference ETPs and the Fund's transactions could exacerbate the price changes of
the Reference ETPs and may impact the ability of the Fund to achieve its investment
objective.
In certain cases, the market for the Fund’s investments may
lack sufficient liquidity for all market participants' trades. Therefore,
the Fund may have difficulty transacting in it and/or in correlated investments, such as swap contracts. Further, the Fund's transactions could exacerbate illiquidity and volatility in the
price of the securities and correlated derivative instruments.
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, tariffs, trade wars, 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.
The economic, fiscal, monetary and foreign policies of the U.S. government, including the imposition of tariffs, changes to its federal agencies
and changes to regulatory policies, will impact the U.S. economy and could lead to increased market volatility and may adversely impact the overall market and individual securities.
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.
The Fund expects to gain exposure to silver and
generate qualifying income by investing in silver indirectly through a
wholly-owned subsidiary organized under the laws of the Cayman Islands. To comply with the asset diversification test applicable to a RIC, a Fund will limit its investments in such subsidiary to 25% of
the Fund's total assets at the end of each tax quarter. A Fund may, however, exceed this amount from time to time if the Adviser believes doing so is in the best interests of the Fund,
provided, however, that the Fund intends to continue to comply with the asset diversification test applicable to RICs. If the Fund's investments in the subsidiary were to exceed 25%
of the Fund's total assets at the end of a tax quarter, the Fund may no longer be eligible to be treated as a RIC. The Adviser will carefully monitor the Fund's
investments in the subsidiary to ensure that no more than 25% of the Fund's assets are invested
in the subsidiary at the
end of each tax quarter. The Fund intends to invest in complex derivatives for which there is not clear guidance from the Internal Revenue Service ("IRS") as to the calculation of
such investments under the asset diversification test applicable to RICs. There are no assurances that the IRS will agree with the Fund's calculation under the asset diversification test
which could cause the Fund to fail to qualify as a RIC.
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.
Subsidiary Investment Risk — By investing in the Subsidiary,
the Fund is indirectly exposed to the risks associated with the
Subsidiary’s investments. Since the Subsidiary is organized under the law of the Cayman Islands and is not registered with the SEC under the Investment Company Act of 1940, as amended, the Fund will not
receive all of the protections offered to shareholders of registered investment companies. Changes in the laws of the United States and/or the Cayman Islands could result in the
inability of the Fund and/or the Subsidiary to operate as intended, which may negatively
affect the Fund and its shareholders.
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.
Futures Contracts Risk — The use of futures contracts is
subject to special risk considerations. The primary risks associated with
the use of futures contracts are (a) the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; (b) the
possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses caused by unanticipated market
movements, which are potentially unlimited; (d) the Adviser’s inability to predict correctly the direction of market prices, interest rates, currency exchange rates and other economic
factors, as applicable; (e) the possibility that the counterparty will default in the performance of its obligations; and (f) if the Fund has insufficient cash, it may have
to sell securities or financial instruments from its portfolio to meet daily variation margin
Summary Prospectus
6
Direxion Daily Silver Bull 2X ETF
requirements, which may
lead to the Fund selling securities or financial instruments at a time when it may be
disadvantageous to do so.
The Fund does not intend to hold futures contracts through their expiration dates;
therefore, as a futures contract approaches its settlement date, the Fund may sell futures contracts and replace the position with a similar contract with a more distant
settlement date. This process is referred to as “rolling” a futures contract. Although the Fund will attempt to “roll” from an expiring futures contract to another contract that
the Adviser believes will generate the greatest yield for the Fund, the Fund nevertheless may endure a cost to “roll” the contracts. In the event of a commodity futures market where
near month contracts set to expire trade at a higher price than the next expiring month contract, a situation referred to as “backwardation,” then absent the impact of the
overall movement in commodity prices, the Fund may benefit because it would be selling more expensive contracts and buying less expense contracts when it “rolls” the futures
contracts. Conversely, in the event of a commodity futures market where near month contracts trade at a lower price than next expiring month contract, a situation referred to as
“contango,” then absent the impact of the overall movement in commodity prices, the Fund may experience an adverse impact because it would be selling less expensive contracts and buying more
expense contracts. The impact of backwardation and contango may cause the total return of the Fund to vary significantly from the total return of other price references (such
as the spot price). In the event of a prolonged period of contango, and absent the impact of rising or falling spot prices, there could be a significant negative impact on the
Fund when it “rolls” its futures contract positions.
If the Fund’s ability to obtain exposure to futures
contracts is consistent with its investment objective is disrupted for any
reason, including limited liquidity in the futures market, margin requirements, position limits, accountability levels, or other limitations imposed by the Fund’s futures commission merchants, the
listing exchanges or the CFTC, the Fund may not meet its investment objectives and may experience significant losses. Under such circumstances, the Adviser intends to take actions it
believes is appropriate and in the best interests of the Fund. These actions may cause the Fund’s performance to deviate from that of the Index.
Early Close/Trading Halt Risk
— An exchange or market may close early and unexpectedly or issue trading halts on specific securities or
financial instruments. Under such circumstances, the Fund may be unable to execute intended portfolio transactions, rebalance its portfolio, or 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 or
reduced gains. Additionally, an exchange or market may also halt the trading of the Fund’s shares, limiting an investor’s ability to buy or sell Fund shares on that exchange or
market.
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.
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.
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.
Concentration Risk — The Fund’s investments will be
concentrated (i.e., more than 25% of the Fund’s total assets) in investments that provide exposure to silver. As a
result, the Fund may be more volatile than a Fund with a more diversified
portfolio.
New Fund Risk — The Fund recently commenced
operations, has a limited operating history, and started operations with a
small asset base. There can be no assurance that the Fund will be successful or grow to or maintain a viable size, that an active trading market for the Fund’s shares will develop or be maintained, or
that the Fund’s shares’ listing will continue unchanged.
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.
Summary Prospectus
7
Direxion Daily Silver Bull 2X ETF
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 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 NYSE Arca. 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 had not commenced operations prior to the date of this Prospectus. Upon commencement of operations, 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 |
Portfolio Manager |
| Tony Ng |
Since Inception |
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 Silver Bull 2X ETF
SEC File Number: 811-22201
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