Rafferty Asset Management Closing Three ETFs
The Board of Trustees of the Direxion Shares ETF Trust (the “Board”) has decided to liquidate and close the Direxion Daily EURO STOXX 50 Bull 3X Shares (EUXL), Direxion Daily High Yield Bear 2X Shares (HYDD), and Direxion Daily 7-10 Year Treasury Bear 1X Shares (TYNS), (each, a “Fund” and collectively, the “Funds”) based on the recommendation of Rafferty Asset Management, LLC, (“Rafferty”) the Funds’ investment advisor.
The Funds will cease trading on the NYSE Arca, Inc. (“NYSE”) and will be closed to purchase by investors as of the close of regular trading on the NYSE on October 11, 2019 (the “Closing Date”). The Funds will not accept purchase orders after the Closing Date.
Due to the Funds’ inability to attract sufficient investment assets, Rafferty believes they cannot continue to operate the Funds in an economically efficient manner. As a result, the Board concluded that liquidating and closing the Funds would be in the best interest of the Funds and their shareholders.
Shareholders may sell their holdings in the Fund prior to the Closing Date and customary brokerage charges may apply to these transactions. However, from October 11, 2019 through October 18, 2019 (the “Liquidation Date”) shareholders may only be able to sell their shares to certain broker-dealers and there is no assurance that there will be a market for a Fund’s shares during this time period. Between the Closing Date and the Liquidation Date, each Fund will be in the process of closing down and liquidating its portfolio. This process will result in a Fund increasing its cash holdings and, as a consequence, not tracking its underlying index, which is inconsistent with each Fund’s investment objective and strategy.
On or about the Liquidation Date, each Fund will liquidate its assets and distribute cash pro rata to all remaining shareholders who have not previously redeemed or exchanged their shares. These distributions are taxable events. In addition, these payments to shareholders will include accrued capital gains and dividends, if any. As calculated on the Liquidation Date, each Fund’s net asset value will reflect the costs of closing the Fund. Once the distributions are complete, the Funds will terminate.