Direxion Indexed Commodity Strategy Fund

  • FUND SYMBOL

    DXCTX

  • BLOOMBERG INDEX

    ABCERI

  • CUSIP

    254939457

  • EXPENSE RATIO (GROSS/NET %)

    1.42 / 1.42*

  • INCEPTION DATE

    Jun 10, 2008

  • FUND SYMBOL

    DXSCX

  • BLOOMBERG INDEX

    ABCERI

  • CUSIP

    254939341

  • EXPENSE RATIO (GROSS/NET %)

    2.17 / 2.17*

  • INCEPTION DATE

    Mar 04, 2010

  • FUND SYMBOL

    DXCIX

  • BLOOMBERG INDEX

    ABCERI

  • CUSIP

    254939382

  • EXPENSE RATIO (GROSS/NET %)

    1.17 / 1.17*

  • INCEPTION DATE

    May 01, 2009

Overview

The Direxion Indexed Commodity Strategy Fund seeks investment results, before fees and expenses, that track the performance of the Auspice Broad Commodity ER Index, (ABCERI), a long/flat index, that can be exposed to up to 12 commodities (long) or cash (flat).

DXCIX DXCTX DXSCX
Overall Morningstar Rating1 5Stars 5Stars

Out of 110 Commodity Broad basket funds as of 9/30/2017. An investments overall Morningstar Rating, based on its risk adjusted return, is a weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosures below for details.

Strategy & Benefits

Principal Investment Strategy

The investment strategy of the Direxion Indexed Commodity Strategy Fund includes:

  • A quantitative, strategic index-based approach to commodity investing
  • Exposure to 12 commodities that can individually be long or flat (if a short signal is triggered the position is moved to cash)
  • The ability to make position changes intra-month based on trends
  • Monthly rebalance based on risk reduction where the allocation of individual components is reduced if volatility exceeds certain predetermined risk levels
  • A “smart” contract roll approach1

1 Smart Contract Roll Approach – A futures contract roll approach designed to select cost effective futures contracts to roll into upon expiration of current contract.

Why Invest in the Fund?

  • The long/flat approach provides exposure to commodities that can individually be positioned long or flat (in cash) based upon price trends
  • Seeks to mitigate the downside risk and maximum declines relative to notable long-only commodity indices
  • Has the flexibility to make individual commodity position changes intra-month
  • Risk management controls designed to adjust exposure levels if volatility gets too high
  • Low- or non-correlation to stocks and bonds
  • Disciplined, quantitative, rules-based approach to commodity investing

Why Commodities?

Not just commodities – Long/Flat commodities.

Most traditional commodity funds provide long only exposure to commodities. This limits their potential to contribute to a portfolio’s long-term performance because they only benefit if commodity prices rise.

The Direxion Indexed Commodity Strategy Fund seeks to match the performance of the Auspice Broad Commodity ER Index (ABCERI), which provides exposure to 12 commodities that can individually be positioned long or flat (in cash) based upon price trends.

This long/flat index is potentially more adaptive to volatile commodity markets because it seeks to take advantage of individual commodities by going long when prices rise, and mitigate risk by going flat (to cash) when prices fall.

Why consider long/flat commodities?

Most traditional commodity funds can only benefit if commodity prices rise. However, these long-only commodity strategies have shown to be inconsistent over time because:

  • Commodity returns are typically cyclical and sporadic
  • Individual commodity sub-sectors tend to perform dissimilarly in different market environments
  • Significant draw-downs can be damaging to the long-term performance of a portfolio

Within the inherently volatile commodity markets, a long/flat approach is potentially more adaptive to whip-sawing market conditions.

Fund Details

Component Sectors and Current Positioning

Metals Position (Long/Flat)
Copper Long
Gold Long
Silver Flat
Agriculture Position (Long/Flat)
Corn Flat
Cotton Flat
Soybeans Flat
Sugar Flat
Wheat Flat
Energy Position (Long/Flat)
Crude Light Flat
Gasoline Long
Heating Oil Long
Natural Gas Flat

All data as of 9/30/2017 and is subject to change at any time and are not recommendations to buy or sell any security. When the positions within the various components are flat, they will be invested in cash and U.S. Treasury Bills. Individual components may vary based on risk levels.

Target Index

The Auspice Broad Commodity ER Index aims to capture upward trends in the commodity markets while minimizing risk during downward trends. The index uses a quantitative methodology to track either long or flat positions in a diversified portfolio of 12 commodity futures covering energy, metals, and agriculture. The index incorporates dynamic risk management and contract rolling methods.

Index Comparison

Auspice Broad Commodity ER Index vs. long-only commodity indexes

ABCERI S&P GSCI BCOM TR DBC CI
Annualized Return (%) -2.00 -8.66 -6.71 -7.62
Annualized Standard Deviation (%) 8.59 19.36 14.00 17.08
Correlation 0.66 0.79 0.72
Maximum Drawdown (%) -36.56 -67.78 -58.34 -64.49

Source: Bloomberg. Data from 10/1/2010 – 9/30/2017. October 1, 2010 is the inception of the Auspice Broad Commodity ER Index. Index returns and correlations are historical and are not representative of any fund performance. Total returns of the index include reinvested dividends. Past performance does not guarantee future results.  One cannot invest directly in an index. The indexes are composite indexes of commodity sector returns representing unmanaged, unleveraged, long-only investment in commodity futures that are broadly diversified across the spectrum of commodities. 

  • S&P Goldman Sachs Commodity Index (S&P GSCI), a composite index of commodity sector returns representing an unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities;
  • Bloomberg Commodity Total Return Index (BCOM TR), a broadly diversified index that allows investors to track 19 commodity futures through a single, simple measure
  • Deutsche Banc Liquid Commodity Optimum Yield Index (DBC CI), an index composed of futures contracts on 14 of the most heavily-traded and important physical commodities in the world.

Standard Deviation is a measure of the dispersion of a set of data from its mean.
Correlation is a statistical measure of how two securities move in relation to each other.
Maximum Drawdown is the greatest percent decline from a previous high.

Pricing and Performance

NAV information as of December 15, 2017. Line chart shows pricing trend over the last 30 days.

fund symbol

DXCTX

  • Net asset value (NAV)

    • 13.23
    • 0.03
    • 0.23

fund symbol

DXSCX

  • Net asset value (NAV)

    • 12.61
    • 0.03
    • 0.24

fund symbol

DXCIX

  • Net asset value (NAV)

    • 13.41
    • 0.02
    • 0.15

* The Net Expense Ratio includes management fees, other operating expenses and Acquired Fund Fees and Expenses. If Acquired Fund Fees and Expenses were excluded, the Net Expense Ratio would be 1.26% for DXCTX, 2.01% for DXSCX, and 1.01% for DXCIX. The Fund’s Adviser, Rafferty Asset Management, LLC (“Rafferty”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to cap all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2019, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 1.26% for Class A Shares, 2.01% for Class C Shares and 1.01% for Institutional Class Shares 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).

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate. An investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Returns for performance under one year are cumulative, not annualized. For the most recent month-end performance please visit the funds website at roo-okt.ru.

Short-term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Because of ongoing market volatility, fund performance may be subject to substantial short-term changes. For additional information, see the fund’s prospectus.

Distributions

  • DXCTX
  • Direxion Indexed Commodity Strategy Fund - A Shares
Record Date Ex Date Pay Date Income Dividend Short-Term Capital Gain Long-Term Capital Gain
10/27/2017 10/30/2017 10/30/2017 0.69633
  • DXSCX
  • Direxion Indexed Commodity Strategy Fund - C Shares
Record Date Ex Date Pay Date Income Dividend Short-Term Capital Gain Long-Term Capital Gain
10/27/2017 10/30/2017 10/30/2017 0.57544
  • DXCIX
  • Direxion Indexed Commodity Strategy Fund - Institutional
Record Date Ex Date Pay Date Income Dividend Short-Term Capital Gain Long-Term Capital Gain
10/27/2017 10/30/2017 10/30/2017 0.77141