Direxion is set to begin trading their new “Direxion Airline Shares ETF” (NYSE:FLYX) tomorrow. The Direxion Airline Shares (“Fund”) seeks daily investment results, before fees and expenses, of the price performance of the NYSE Arca Global Airline Index. The NYSE Arca Global Airline Index (Index Symbol: AXGAL) is a modified equal-dollar weighted index designed to track the performance of listed securities in the global passenger airline sector.
Total Annual Fund Operating Expenses After Expense Waiver/Reimbursement: 0.55%
Principal Investment Strategies
The Fund, under normal circumstances, invests at least 80% of its net assets in the equity securities that comprise the Index and/or: financial instruments (as defined below) that provide exposure to the Index. These financial instruments include: futures contracts; options on securities, indices and futures contracts; equity caps, collars and floors; swap agreements; forward contracts; short positions, reverse repurchase agreements; and other financial instruments. On a day-to-day basis, the Fund also holds 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 Index is a modified equal-dollar weighted Index designed to measure the performance of highly capitalized and liquid U.S. and international passenger airline companies identified as being in the airline industry, as defined below, and listed on developed and emerging global market exchanges. The Index Provider, Archipelago Holdings Inc. (“Arca” or the “Index Provider”), an affiliate of NYSE Euronext, Inc., defines “developed markets” as countries with western-style legal systems, transparent financial rules for financial reporting and sophisticated, liquid and accessible stock exchanges with readily-exchangeable currencies. As of June 10, 2010 the market capitalizations of stocks included in the Index range from approximately $660 million to approximately $8.6 billion, which includes small-, mid and large-capitalization stocks as defined by the Index Provider.
The Fund seeks to remain fully invested at all times consistent with its stated goal. At the close of the markets each trading day, Rafferty positions the Fund’s portfolio so that its exposure to the Index is consistent with the Fund’s investment objective. The impact of the Index’s movements during the day will affect whether the Fund’s portfolio needs to be re-positioned. For example, if the Index 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 Index has fallen on a given day, net assets of the Fund should fall, meaning the Fund’s exposure will need to be reduced. The Fund will concentrate its investment in a particular industry or group of industries to approximately the same extent as the Index is so concentrated.
For the full prospectus click: HERE
Related ETFs: Guggenheim Airline ETF (NYSE:FAA)