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The Financial Trends Strategy Fund

A hedge against fluctuating interest rates Interest rates play an important role in fixed income portfolios. Generally speaking, when interest rates go up (usually when the Federal Reserve is trying to curb inflation), the prices of bonds tend to go down, mak­ing fixed income portfolios worth less. On the other hand, when interest rates decrease (often in an attempt by the Fed to stimulate the economy), the prices of bonds tend to rise, thus increasing the value of fixed income portfolios. The Financial Trends Strategy Fund can help investors to benefit from interest rate changes by shorting the U.S. Treasury in rising interest rate environments – and going long on U.S. Treasuries when interest rates are dropping. A hedge against inflation and deflation The Financial Trends Strategy Fund provides a potential hedge for fixed income investors in periods of inflation because of its ability to position its components short. Of course, during periods of deflation, the opposite is true – and investors have the potential to benefit from the Fund's long positions.

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A good complement to fixed income portfolios

The Financial Trends Strategy Fund may be a good complement for fixed income portfolios because it helps to lower a portfolio's standard deviation (a component of measuring volatility) – while helping to maintain a competitive level of returns.

A way to help decrease the volatility of portfolios

As noted earlier, the Fund, which tracks the FTI Index, can help to lower the volatility of portfolios. One of the reasons for this is because the FTI's long/short rules-based methodology allows investors to take advan­tage of independent trends, whether positive or negative, for each component. If the various components are moving in different directions, investors can still benefit.

A unique opportunity for investors

The Financial Trends Strategy Fund is the only index mutual fund available in the marketplace today that offers pure financial futures exposure. The Fund attempts to benefit from all market conditions through its unique long/short mechanism. Its multi-directional nature allows for hedges against both inflation and deflation. Diversification does not guarantee protection against market losses or ensure a gain.

An investor should consider the investment objectives, risks, charges, and expenses of the Direxion funds carefully before investing. The prospectus contains this and other information about Direxion funds. To obtain a prospectus, please contact Direxion Funds at 800.851.0511. The 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 risks associated with the Direxion Financial Trends Strategy Fund are detailed in the prospectus and Statement of Additional Information (available upon request, free of charge). These include, but are not limited to, risks of high portfolio turnover; risk of tracking error; leverage, derivatives and counterparty risks; risk of non-diversification; risk of interest rate changes; risks of investing in other investment companies and Exchange-Traded Funds (ETFs); risks of investing in equity securities and foreign instruments; risks of currency exchange rates; market risk, risk of options and futures contracts; risk of shorting instruments; volatile markets; security selection risk; credit risk; and valuation time risk.

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