A Forward Split On Five Of Direxion’s 3X ETFs Goes Into Effect (EDC, DRN, TYH, FAS, MWJ)

As we stated previously – Direxion, had announced a forward split of the shares on five of its existing ETFs. Direxion conducted a 4-for-1 split of Daily Emerging Markets Bull 3x Shares (NYSE:EDC), Daily Real Estate Bull 3x Shares (NYSE:DRN) and Daily Technology Bull 3x Shares (NYSE:TYH). In addition, Direxion will conduct a 3-for-1 split of Daily Financial Bull 3x Shares (NYSE:FAS) and Daily Mid Cap Bull 3x Shares (NYSE:MWJ).  We have provided details on the forward split from Direxion including a question and answer segment below:  

Here Is A Link To The Following Details: HERE   

Direxion Shares would like to announce its intention to conduct a forward split on the following five (5) ETFs:

Symbol  

 

  

 

Fund  

 

  

 

CUSIP  

 

  

 

Split Ratio*  

 

  

 

(EDC)  

 

  

 

Daily Emerging Markets Bull 3x Shares  

 

  

 

25459W 300  

 

  

 

4:1  

 

  

 

(DRN)  

 

  

 

Daily Real Estate Bull 3x Shares  

 

  

 

25459W 755  

 

  

 

4:1  

 

  

 

(TYH)  

 

  

 

Daily Technology Bull 3x Shares  

 

  

 

25459W 102  

 

  

 

4:1  

 

  

 

(FAS)  

 

  

 

Daily Financial Bull 3x Shares  

 

  

 

25459W 516  

 

  

 

3:1  

 

  

 

(MWJ)  

 

  

 

Daily Mid Cap Bull 3x Shares  

 

  

 

25459W 730  

 

  

 

3:1  

 

  

 

After the close of the markets on April 30, 2010 (the “Record Date”), the Funds will effect a forward split of their issued and outstanding shares. The number of the Fund’s issued and outstanding shares will increase and the per share net asset value (“NAV”) and next day’s opening market price of the Fund will decrease in proportion to the ratios referenced in the above table. Shareholders of record two days prior to the Record Date to the Payable Date will participate in the forward split. Shares of the Fund will begin trading on NYSE Arca, Inc. on a split-adjusted basis on May 5, 2010 (the “Ex Date”).   

Split Schedule  

 

Record Date 4/30/10 Payable Date 5/4/10 Ex Date 5/5/10 Due-Bill Redemption Date 5/7/10*   

A shareholder’s investment value will not be affected by the split.   

 The table below illustrates the effect of a hypothetical 3-for-1 forward split:  

Period  

 

  

 

# of Shares Owned  

 

  

 

Hypothetical NAV  

 

  

 

Total Market Value  

 

  

 

Pre-Split  

 

  

 

100  

 

  

 

$150  

 

  

 

$15,000  

 

  

 

Post-Split  

 

  

 

300  

 

  

 

$50  

 

  

 

$15,000  

 

  

 

*EX: A ratio of 3:1 means that you will receive two (2) additional shares for every one (1) share you own as of the Record Date  

Q: Will this affect the total value of my investment?    

A: No. A forward split simply means there will be an increase in the number of the ETF’s shares outstanding and a proportionate decrease in the ETF’s price per share. This means you will own more shares, however, the price per share will be proportionately lower and as a result, your investment value will not change.    

Q: Will the forward split create a taxable event for me?    

A: No. There will be no taxable implications associated with the forward split.    

Q: Will the forward split affect trading availability or liquidity?    

A: Funds undergoing splits are expected to trade proportionately more volume due to their lower share prices. We do not expect the forward split to affect availability or to negatively affect liquidity.    

Q: Why has Direxion Shares decided to forward split these funds?    

A: Direxion believes it is in our shareholders’ best interest to do so and reserves the right to forward or reverse split in order to keep an ETF’s price in a convenient trading range.    

Q:Who will be participating in the forward split?    

A: Any holder of record as of the Record Date should expect to receive the additional shares on the Payable Date, May 4th, 2010. Those who are not holders of record as of the Record Date, but have purchased shares before the Ex Date, at the pre-split price, will also be entitled to the additional shares and should expect to receive them on the Due-Bill Redemption date, May 7th, 2010.    

Q: Will a split affect limit and GTC orders?    

A: Yes. For example, in a 3:1 forward split, an order for 100 shares at $150 per share becomes an order for 300 shares at $50 per share. Buy orders are automatically adjusted by the NYSE, however, sell orders are not and need to be adjusted by the shareholder or shareholder’s broker.    

* Due-Bill Redemption Date –The due-bill redemption date is the day which comes two business days after the ex-date. This day is a “catch-all” for all unsettled trades occurring between record dates and including payable date. This means anyone buying shares beginning two business days prior to record date through and including the payable date will be entitled to post-split shares, which will be received on the due-bill redemption date.    

Please note: Direxion Shares has attempted to notify all trading platforms with details of the impending split. We encourage you to contact your broker or trading platform with any questions associated with this event.    

An investor should consider the investment objectives, risks, charges, and expenses of Direxion Shares carefully before investing. The prospectus and summary prospectus contain this and other information about Direxion Shares. Click here to obtain a prospectus and summary prospectus. The prospectus and summary prospectus should be read carefully before investing.    

Investing in funds that invest in specific industries or geographic regions may be more volatile than investing in broadly diversified funds. The use of leverage by a fund means the Funds are riskier than alternative investments which do not use leverage.    

The Leveraged ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investments. Leverage ETFs are not designed to track the underlying index over a longer period of time.    

The risks associated with the funds are detailed in the prospectus which include adverse market condition risk, adviser’s investment strategy risk, aggressive investment techniques risk, concentration risk, counterparty risk, credit and lower-quality debt securities risk, equity securities risk, currency exchange risk, daily correlation risk, daily rebalancing and market volatility risk, depository receipt risk, foreign and emerging markets securities risk, sector securities risk, interest rate risk, inverse correlation risk (Inverse Fund or Inverse ETF), leverage risk, market risk, non-diversification risk, shorting risk, small and mid cap company risk, tracking error risk, market timing activity and high portfolio turnover risk, investing in other investment companies and ETFs risk, commodities securities risk, geographic concentration risk, valuation time risk, derivatives risk, commodity-linked derivatives risk, wholly-owned subsidiary risk, tax risk, options and futures contracts risks, security selection risk, Debt Instrument Risk, Gain Limitation Risk, Real Estate Investment Risk, U.S. Government Securities Risk, and Special Risks of Exchange-Traded Funds. Shorting securities occurs when investors sell securities they don’t own and are committed to repurchasing eventually.    

Distributor: Foreside Fund Services, LLC.   

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