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Direxion Launches Synthetic Convertible Security Strategies

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SOURCE Direxion

Alternative Investment Solutions Provider Expands Lineup of Tradable Mutual Funds

NEW YORK, Feb. 18, 2014 /PRNewswire/ -- Direxion, a leader in alternative investment solutions, has expanded its suite of tradable mutual funds by launching the Direxion Indexed Synthetic Convertible Strategy Fund (DXCBX) and Direxion Indexed Synthetic Convertible Strategy Bear Fund (DXCVX), offering investors access to the risk/return characteristics of the convertible bond asset class through a synthetic approach that can potentially help alleviate liquidity, transparency and capacity issues that are characteristic of some traditional convertible bonds.

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"We continue to seek ways for investors to gain exposure to different asset classes that allow them to trade freely," said Edward Egilinsky, Managing Director and Head of Alternative Investments at Direxion. "These mutual funds provide our clients exposure to the convertible space without having to own the underlying bonds, which have certain limitations." 

The bull and bear funds allow investors to access either side of the convertible bond market through a transparent and liquid approach. 

"Our tradable mutual fund business continues to gain traction and we are committed to the development of innovative products within this business line," Mr. Egilinsky added.                    

The Direxion Indexed Synthetic Convertible Strategy Fund seeks to generate investment results, before fees and expenses, that replicate the performance of the QES Synthetic Convertible Index. The Direxion Indexed Synthetic Convertible Strategy Bear Fund attempts to obtain investment results mirroring the inverse of the performance of the same index, before fees and expenses.

The QES Synthetic Convertible Index was created to capture high correlation and similar overall returns to the convertible bond universe, and attempts to achieve its goal by investing in liquid market instruments that share comparable characteristics with convertible bonds. The index, which has the flexibility to rebalance weekly, first analyzes aggregate data to determine how sensitive prospective investments are to factors such as changes in credit spreads, interest rates and equity prices. Then, it builds a portfolio composed of equity, fixed income and credit investments to generate synthetic exposure to those asset classes, with potentially greater liquidity than an actual convertible bond portfolio.  

Convertible bonds may be less sensitive to rising interest rates and inflation than non-convertible bonds because of their embedded stock-conversion option.  

"Our Funds enable investors to potentially achieve convertible-bond-like returns through transparent, systematic strategies with daily liquidity," said Mr. Egilinsky. "There is continued interest from advisors in convertibles because they have different behavioral characteristics than other types of bonds, which may help provide diversification within an overall fixed income portfolio."  

For more information about Direxion, please contact James Doyle at 973-850-7308 or jdoyle@jcprinc.com.

About Direxion
Direxion Funds and Direxion Shares, managed by Rafferty Asset Management, LLC, offer leveraged index funds, ETFs and alternative-class fund products for investment advisors and sophisticated investors who seek to effectively manage risk and return in both bull and bear markets. Founded in 1997, the company has approximately $7.3 billion in assets under management as of 12/31/13. The company's business model is built on continuous product innovation, exceptional customer service and a commitment to building strategic relationships with distribution partners. For more information, please visit www.direxionfunds.com.

An investor should consider the investment objectives, risks, charges, and expenses of the Direxion Funds carefully before investing. The prospectus and summary prospectus contain this and other information about Direxion Funds. To obtain a prospectus or summary prospectus, please contact the Direxion Funds at 800.851.0511. The prospectus or summary prospectus should be read carefully before investing.

An investment in the fund involve risk, including the possible loss of principal. The fund may engage in active and frequent trading, leading to increased portfolio turnover, higher transaction costs, and the possibility of taxable events for the investor. The fund may invest in financial instruments involving counterparties and bears the risk of loss in the event of the default or bankruptcy of a swap agreement counterparty. The fund includes investments in derivatives that are subject to market risks that may cause their prices to fluctuate over time and may result in larger losses or smaller gains. The value of a synthetic convertible instrument risks responding differently to market fluctuations than a convertible security. There is no guarantee that the fund will achieve a high degree of correlation with its benchmark index which may prevent the fund from achieving its investment objective. Additional risks are described in detail in the prospectus.For additional information and most recent performance, visit www.direxionfunds.com or call 877-437-9363.

Distributor: Rafferty Capital Markets, LLC.

CONTACT: James Doyle
Jennifer Connelly Public Relations 
973-850-7308
jdoyle@jcprinc.com

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