Why IPOs?

IPOs have substantial economic significance, and are the lifeblood of global Equity Capital Markets (ECM) activity. On average, over $400 billion of market capitalization has been added through IPO and spin-off activity every year since 1995. Investors may find IPOs attractive because:

• IPOs may possess the potential opportunity for growth.
• Diversification - IPOs and new issues exhibit unique performance over the first several years, acting as a separate asset class.
• The pipeline for the number of global IPOs is substantial - continually offering new opportunities.

Principal investment strategy

This Fund manages new issues through three distinct stages: Here's how it works:

• Stage 1: Initial Offerings (first 60 days) - The Fund participates in initial public offerings to take advantage of any potential under-pricing in the global IPO market.
• Stage 2: Year 1 Issues - the Fund selects new issues, expected to over-perform, to hold in long positions.
• Stage 3: Year 2-4 Issues - the Fund selects new issues, expected to under-perform, to sell short.

All issues are analyzed independently for each segment of the life cycle and their performance is actively monitored once in the portfolio. Purchasing an IPO in either of the first two stages does not necessarily mean that it will be kept in the portfolio throughout the entire life cycle.

The Direxion Long/Short Global IPO fund is managed by Direxionfunds.

Why invest in the fund?

The key benefits of investing in this strategy include:

• Access to a market that has typically been reserved for institutional clients.
• The ability to diversify outside of the traditional style box.
• Participation in markets usually not adequately represented in U.S. and Global equity indices.
• Ability to participate in positive market performance while maintaining downside protection through the fund's hedging component.
• Investing in distinct equity exposure that can exhibit lower correlation to stock indices due to its unique attributes.

Adding IPOs to Investor Portfolios

The IPOX Global Long Equity Index has exposure to both U.S. and global IPOs which may represent diverse holdings relative to traditional equity indices. Incorporating an IPO strategy into a diversified portfolio can potentially provide additional returns relative to other types of U.S. and global equity investments. However, as indicated by the long only index's risk characteristics, there may be an increased need for risk mitigation. For this reason, the Direxion Long/Short Global IPO Fund employs a hedging strategy in the form of shorting a broad market U.S. index.

The above IPO index represents only a portion of the Direxion Long/Short Global IPO Fund which also has syndicate level access to IPOs and a shorting component based on the MSCI U.S. Broad Market Index. The performance listed here is for illustrative purposes only and is not meant to represent fund performance. Diversification does not protect against a loss or ensure a gain. Large Cap U.S. Equities are represented by the S&P 500 Index and International Equities are represented by the MSCI EAFE Index. One cannot invest directly in an index.

 

Literature

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Fund details

* Estimated Current Exposure Level data updated as often as once per minute, but this web page must be refreshed to obtain updated data.

Investment objective

The Direxion Long/Short Global IPO Fund seeks capital appreciation.

Investment strategy

• The Fund seeks a unique equity return stream through the implementation of a diversified investment strategy that provides access to U.S. and global Initial Public Offerings (IPOs).
• Exposure is obtained primarily through investing directly into individual IPOs and by seeking to replicate performance of the IPOX Global Index.
• The Strategy also has the ability to hedge its position by shorting a U.S. Broad Market Index, especially in periods of inactive IPO deal flow and/ or broader equity market decline.

	Quarterly IPO Participation Representative Holdings List (as of 12/30/2011) Groupon Inc                                                         United States Angie's List Inc United States Delphi Automotive PLC United States Intermolecular Inc. United States Zynga Inc United States Jive Software Inc United States Baoxin Auto Group Ltd China Chow Tai Fook Jewellery Group Ltd China Parkson Retail Asia Singapore Michael Kors United States
	Sectors (as of 12/30/2011)
	Countries (as of 12/30/2011)   Countries Argentina Austria China Chile Britain Hong Kong Columbia Czech India Brazil Denmark Indonesia Egypt France Israel Mauritius Germany Japan South Africa Greece Malaysia Australia Guernsey Mongolia New Zealand Italy Philippines Canada Luxembourg Russia Cayman Islands Monaco Singapore Mexico Netherlands South Korea Panama Norway Taiwan United States Poland Thailand Spain Sweden Switzerland Turkey
	Fund Risk/Metrics (as of 12/30/2011) Correlation   S&P 500® 0.84 Barclays Capital Aggregate Bond Index 0.18 Beta to S&P 500® 1.28 Standard Deviation 28.23%
	Regulatory Documents (including Prospectus, SAI, Semi-Annual Report and Annual Report)
	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 the Direxion Funds at 800.851.0511. The prospectus should be read carefully before investing. You will be assessed a 1.0% redemption fee on shares redeemed (through sales or exchanges) within 90 days of the date of purchase. The principal risks of investing in the Direxion Long/Short Global IPO Fund are Adverse Market Conditions Risk, Counterparty Risk, Currency Exchange Rate Risk, Derivatives Risk, Emerging Markets Risk, Equity Securities Risk, Foreign Instrument Risk, High Portfolio Turnover, IPO Risk, Leverage Risk, Market Risk, Non-Diversification Risk, Options and Futures Contracts Risk, Security Selection Risk, Shorting Instruments Risk, Tracking Error Risk, Valuation Time Risk, and Volatile Markets Risk. IPOX® is an international trademark of IPOX Schuster LLC used under license. Initial Public Offerings Indexes (IPOX) and IPOX Derivatives. Pat. No. 7,698,197. Back to Top

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