Form 497K Direxion Shares ETF Trus
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E-mail| Summary Prospectus |
July 29, 2026 |
| Direxion Shares ETF Trust |
|
Direxion MU Defined Income Boost ETF
| Ticker: MUIB |
| Listed on: Cboe BZX Exchange |
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 July 21, 2026, are incorporated by reference into this Summary Prospectus.
Investment Objective
The Direxion MU Defined Income Boost ETF (the “Fund”)
seeks investment results, before fees and expenses, that track the Cboe MU Defined Income
Index (the “Index”).
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)
|
0.02% |
| Total Annual Fund Operating Expenses |
0.99% |
| Expense Cap/Reimbursement(2)
|
-0.02% |
| Total Annual Fund Operating Expenses After Expense Cap/Reimbursement |
0.97% |
(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 |
| $99 |
$313 |
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.
Principal Investment Strategy
The Index is designed to track the performance of an investment strategy that
systematically attempts to collect a target amount of income from option premiums by writing (selling) weekly, out-of-the-money equity call options on an underlying security
(i.e., common shares of Micron Technology, Inc. (NASDAQ: MU) ("MU")) based on the Index’s target distribution
amount, with daily delta hedging (as discussed below) conducted through long positions in the underlying security. The Index’s target distribution amount is set by Cboe Global
Indices, LLC (the “Index Provider”) and is currently set at an annualized distribution rate of 20%.
Micron Technology, Inc. is a semiconductor company that
produces computer memory and computer data storage, including dynamic
random-access memory, flash memory, and USB flash drives. MU 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 Micron Technology, Inc. pursuant to the Exchange Act can be located by reference to the Securities and Exchange
Commission file number 001-10658 through the Securities and Exchange Commission’s website at www.sec.gov. In addition, information regarding Micron Technology, Inc. may be
obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated documents. As of June 30, 2026, MU is assigned to the
information technology sector and the semiconductor industry.
The Fund, under normal circumstances, invests at least 80% of its net assets (plus any borrowings for investment purposes) in the Index’s
constituent securities and financial instruments, such as swap agreements and options, that, in combination,
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Direxion MU Defined Income Boost ETF
provide exposure to the
Index consistent with the Fund’s investment objective. The Fund principally will obtain exposure to the Index through swap agreements.
Call Options Strategy and Delta Management
The Index is constructed such that at the end of each week (generally Friday), an out-of-the-money call option on MU is sold that typically expires
at the end of the following week. The seller of a call option receives a payment (“premium”) from the buyer. Using this strategy, the Index generates income
in the form of option premiums. In a call option, the seller is obligated to sell shares of the underlying security to the buyer at a specified price (“strike price”) at a specified
date (“expiration date”). At the expiration date, if the price of the underlying security is above the strike price (“in-the-money”), the buyer will exercise the call option, benefiting
from the ability to purchase the shares from the seller at a price lower than the current market price. If the price of the underlying security is lower than the strike price
(“out-of-the-money”), the call option will not be exercised,
and the seller will retain the shares of the security and the premium.
The option strike price is determined in a formulaic manner based on the Index’s target distribution amount. The Index’s option strike
selection is adjusted weekly based on the price and volatility of MU, with the objective of maintaining a more consistent risk profile across changing market conditions.
As selling call options introduces negative delta exposure (meaning the position may
lose value if the stock price increases), the Index employs daily delta hedging. Delta hedging involves buying or selling shares of MU (or equivalent exposure) to maintain
consistent exposure to movements in the price of MU. This hedge position is evaluated and adjusted at the end of each trading day, as the delta of the option position changes
over time due to movements in the underlying stock price, changes in volatility, and the
passage of time.
In addition, the Index includes an options unwind strategy that allows for an options
position that may be closed prior to its scheduled expiration if the option’s delta, measured daily, reaches a specified threshold (e.g., 0.85 delta). This is intended to reduce the likelihood of outsized losses in the event of a significant upward movement in the price of MU that causes the option to
become deep in-the-money. If an option position is closed prior to expiration, a replacement option is generally not sold until the next scheduled weekly option reset.
Distributions
The Fund intends to make distributions twice a month that generally reflect the income and gains generated from the Index’s options strategy
and delta-hedging activity and are calculated based off the Index’s target distribution amount described above. The Index’s target distribution amount is not a guarantee, nor does it represent a particular yield or total
return.
Additionally, at the end of each
quarter, there may be additional distributions paid to investors when market
conditions result in incremental income being generated by the options
strategy and delta hedging. The occurrence
and amount of any such distribution depend on the performance of the underlying security relative to the options sold
and are not guaranteed.
The Fund’s distributions are intended to provide investors with income and gains
generated from its investment strategy. However, in the event that the strategy does not generate the targeted level of income during a period, some or all of the distributions may be
characterized as a return of capital, which are not taxable income but reduce a shareholder’s basis in their Fund shares. The Fund is required to make distributions at least
annually, but the Fund intends to make more frequent distributions. Distributions are not a measure of the Fund’s investment performance.
The Index will be concentrated in the industry or group of industries to which the
underlying security is assigned. The Fund will concentrate its investment in a particular industry or group of industries (i.e., hold 25% or more of its total assets in the stocks of a particular industry or group of industries) to approximately the same extent as the Index is so concentrated.
The Fund uses a “passive” or indexing approach to attempt to achieve its
investment objective. Although the Fund intends to fully replicate the Index, at times the Fund may hold a representative sample of the instruments in the Index that have aggregate
characteristics similar to those of the Index. This means the Fund may not hold all of the instruments included in the Index, its weighting of investment exposure to such instruments or
industries may be different from that of the Index and it may hold instruments that are not included in the Index but are designed to help the Fund track the Index. The Fund will rebalance
its portfolio when the Index rebalances. The Fund’s investment objective is not a fundamental policy and may be changed by the Fund’s Board of Trustees without shareholder
approval.
Principal Investment Risks
An investment in the Fund entails risk. The Fund may not achieve its 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. It is important that investors closely review all
of the risks listed below and understand them before making an investment in the Fund.
Index Correlation Risk — There is no guarantee that the
Fund will achieve a high degree of correlation to the Index and, therefore,
achieve its investment objective. The Fund may have difficulty achieving its investment objective for many reasons, including fees, expenses (including rebalancing expenses), transaction
costs, including but not limited to brokerage and other trading costs, the Fund’s valuation methodology differing from the Index’s valuation methodology, accounting standards
and their application to income items, required compliance with the Fund’s exchange listing standards, disruptions or illiquidity in the markets for the
instruments held by the Fund, the Fund’s holding of uninvested cash, costs of complying with various new or existing regulatory requirements and regulatory and tax considerations, which may
cause the Fund to hold (or not to hold) certain Index constituents. Activities surrounding Index reconstitutions and other Index rebalancing events may hinder the
Fund’s ability to meet its investment
Summary
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Direxion MU Defined Income Boost ETF
objective. The Fund may not
have investment exposure to all of the constituents of the Index or its weighting of investment exposure to such constituents may be different from that of the Index, which
may reduce the Fund’s correlation to the Index.
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.
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.
Options Contracts Risk
— The use of options
contracts involves investment strategies and risks different from those
associated with ordinary portfolio securities transactions. The prices of
options are volatile and are influenced by, among other things, actual and anticipated changes in the value of the underlying instrument, including the anticipated volatility, which are
affected by fiscal and monetary policies and by national and international political, changes in the actual or implied volatility or the reference asset, the time remaining until the
expiration of the option contract and economic events. The value of the options contracts is substantially influenced by the value of MU. The Index may experience substantial
downside from specific option positions and certain option positions may expire worthless. The options are exercisable at the strike price on their expiration date. As an option approaches
its expiration date, its value typically increasingly moves with the value of the underlying instrument. However, prior to such date, the value of an option generally does not
increase or decrease at the same rate as the underlying instrument. There may at times be
an imperfect correlation
between the movement in the values of options contracts and the underlying instrument, and there may at times not be a liquid secondary market for certain options contracts. The
value of the options will be determined based on market quotations or other recognized pricing methods. Additionally, as the options contracts held by the Index are exercised
or expire, it will enter into new options contracts, a practice referred to as “rolling.” If the expiring options contracts do not generate proceeds enough to cover the cost of entering
into new options contracts, the Index may experience losses.
Price Participation Risk — The Fund employs an investment
strategy that seeks to track an Index, which includes the sale of call
option contracts, which limits the degree to which the Fund will participate in increases in value experienced by MU over the weekly call period. This means that if MU experiences an increase in
value above the strike price of the sold call options during a call period, the Fund will likely not experience that increase to the same extent and may significantly underperform MU
over the call period. Additionally, because the Fund is limited in the degree to which it will participate in increases in value experienced by MU over each call period,
but has full exposure to any decreases in value experienced by MU over the call period, the net asset value of the Fund may decrease over any given time period. Since the
constituents in the Index are based principally upon the performance of MU, the Fund’s performance will be based principally upon the performance of MU. The degree of
participation in MU gains the Fund will experience will depend on prevailing market conditions, especially market volatility, at the time the Fund enters into the sold call option
contracts and will vary over different call periods. The value of the options contracts is affected by changes in the value and dividend rates of MU, changes in interest rates, changes in
the actual or perceived volatility of MU and the remaining time to the options’ expiration, as well as trading conditions in the options market. As the price of MU changes and time
moves towards the expiration of each call period, the value of the options contracts, and therefore the Fund’s net asset value, will change. However, it is not expected for
the Fund’s net asset value to directly correlate on a day-to-day basis with the returns of MU. The amount of time remaining until the options contract’s expiration date affects the
impact of the potential options premiums on the Fund’s net asset value, which may not be in full effect until the expiration date of the Fund’s options contracts.
Therefore, while changes in the price of the MU will result in changes to the Fund’s net asset value, the Fund generally anticipates that the rate of change in the Fund’s net asset value will
be different than that experienced by MU.
Distributions Risk — The Fund seeks to distribute cash
twice a month. There is no assurance that the Fund will make each
distribution. If the Fund does make distributions, the amounts of such distributions may vary from one distribution to the next. Additionally, in the event that the Index’s strategy does not
generate the targeted level of income during a period, some or all of the distributions may be characterized as a return of capital, which will decrease the Fund’s net
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Direxion MU Defined Income Boost ETF
asset value and trading
price over time. As a result, an investor may suffer significant losses to their investment.
Net Asset Value Erosion from Distributions Risk —
When the Fund makes a distribution, the Fund’s net asset
value will typically drop by the amount of the distribution on the related
ex-dividend date (i.e., the day on or after which a stock trades without the value of its next dividend payment). The repeated payment of distributions by the Fund may significantly erode the
Fund’s net asset value and trading price over time. As a result, an investor may suffer significant losses to their investment.
Return of Capital Risk — A portion of the Fund’s
distributions are expected to be treated as a return of capital for tax
purposes. Return of capital distributions are not taxable income to a
shareholder, but reduce a shareholder’s basis in their Shares. Such a reduction in tax basis will generally result in larger taxable gains and/or lower tax losses on a subsequent sale of Shares. A
distribution in excess of a shareholder’s basis will be taxable in the same manner as a sale of a shareholder’s Shares. Shareholders who periodically receive the
payments of dividends or other distributions consisting of a return of capital may be under the impression that they are receiving net profits from the Fund when, in fact, they are not.
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.
Call Option Strategy Risk — The call option strategy utilized
by the Index, which the Fund seeks to track, may limit the upside
performance of any position for which a call is sold, since it is effectively selling upside performance in exchange for immediate cash flow. In markets where the underlying security position goes up
dramatically, this could cause the Fund to underperform relative to the underlying security or equity markets generally. The relative pricing of options at different strike levels
can vary due to volatility shifts, liquidity constraints, or other market dynamics, adding an additional layer of uncertainty to the Fund's performance.
Passive Investment and Index Performance Risk —
A third party (the “Index Provider”), who is unaffiliated with the Fund or the Fund's Adviser, maintains and exercises complete control over the
Index. The Index Provider may delay or add a rebalance date, which may adversely impact the performance of the Fund and its correlation to the Index. There is no guarantee that
the methodology used by the Index Provider to identify constituents for the Index will achieve its intended result or positive performance. The Index relies on various sources
of information to assess the potential constituents of the Index, including information that may be based on assumptions or estimates. There is no assurance that the sources of
information are reliable, and the Adviser does not assess the due diligence conducted by the Index Provider with respect to the data it uses or the Index construction and computation
processes. There can be no guarantee that the Index’s methodology or calculation will
be free from error or that
an error will be identified and/or corrected, which may have an adverse impact on the Fund.
The Fund generally will not change its investment exposures, including by buying or selling securities or instruments, in response to market
conditions. For example, the Fund generally will not sell an Index constituent due to a decline in its performance or based on changes to the prospects of an Index constituent, unless
that constituent is removed from the Index with which the Fund seeks correlated
performance.
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 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 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.
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.
Micron Technology, Inc. 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 semiconductor industry, Micron Technology,
Inc. faces risks associated with: volatility in selling prices of its products; the ability to develop and produce new and competitive technologies and products; the highly competitive nature
of the semiconductor industry; its international operations, including geopolitical risks; availability and quality of materials, supplies, and capital equipment and dependency on
third-party service providers; cybersecurity attacks and data breaches; the ability to attract, retain, and motivate highly skilled employees; reductions in demand for its products;
potential concentration of revenues in a few large clients; geopolitical events and pandemics; adequate protection of technology or other intellectual property; exchange
rates; potential incompatibility of product with some or all industry standard software and hardware; increases in costs; adverse government regulations;
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Direxion MU Defined Income Boost ETF
regulatory compliance
costs; litigation; taxes; and indebtedness.
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. The products and services of
AI and big data companies may face obsolescence due to rapid technological
developments and frequent new product or service introduction,
unpredictable changes in growth rates and competition for the services of qualified personnel. 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 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.
Semiconductor Industry Risk– Semiconductor companies may face intense competition, both domestically and internationally, including from subsidized foreign competitors with lower production
costs, 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. Semiconductor companies
typically face high capital costs and such companies may need additional financing, which may be difficult to obtain. They also may be subject to risks relating to research and
development costs and the availability and price of components. 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.
Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is
particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and
internationally, including competition from competitors with lower production costs. In addition, many information technology companies have limited product lines, markets, financial
resources or personnel. The prices of information technology companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend
to be more volatile and less liquid than the overall market. Information technology companies are heavily dependent on patent and intellectual property rights, the loss or
impairment of which may adversely affect profitability. Additionally, companies in the information technology sector may face dramatic and often unpredictable changes in growth rates and
competition for the services of qualified personnel. 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.
Concentration Risk — The Fund will be concentrated in
a particular security, MU, and therefore, a particular industry and will
have more than 25% of its total assets in investments that provide exposure to the information technology sector and the semiconductor industry (the risks of which are described below), the same
industry and/or sector to which MU is assigned. Since the Index is concentrated in a particular security and therefore industry and/or sector, it presents more risks than a portfolio
broadly diversified over several industries. A portfolio invested in multiple securities and industries typically presents less risk than a portfolio concentrated in one security or
industry because market changes that adversely impact one security or industry may benefit others. Because the Fund invests in instruments
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Direxion MU Defined Income Boost ETF
referencing only one
security and industry, it should be expected to increase from any market movements that adversely impact MU and/or information technology sector and the semiconductor industry.
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.
Cash Transaction Risk— At certain times, a Fund may effect
creations and redemptions for cash rather than for in-kind securities. As a
result, a Fund may not be tax efficient and may incur brokerage costs related to buying and selling securities 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.
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.
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.
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 securities of the Index. Under such circumstances, the market for securities of the Index 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 in the securities of the Index.
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 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, utilize derivatives instruments that are less correlated to the Index, change its investment objective by, for example, seeking to track an alternative index, reduce
its exposure for a period of time or close.
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. For example, there is a risk that sharp price declines in securities owned by the Fund may trigger trading halts, which may result in the Fund’s shares trading at
an increasingly large discount to net asset value during part of, or all of, the trading day.
High Portfolio Turnover Risk - The Fund may engage in active and frequent trading, which may lead to increased portfolio turnover, higher transaction
costs, and the possibility of increased short-term capital gains (which will be taxable
Summary Prospectus
6
Direxion MU Defined Income Boost ETF
to shareholders as ordinary
income when distributed to them) and/or long-term capital gains. Active and frequent trading may be due to Index rebalancing, cash purchases and sales of the Fund’s shares or
other portfolio management reasons.
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.
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 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 Cboe BZX Exchange. 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.
Summary Prospectus
7
Direxion MU Defined Income Boost ETF
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 MU Defined Income Boost ETF
SEC File Number: 811-22201
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