Direxion Changes Strategy On 5 ETFs

May 17, 2012

 

Shift In How Costs Are Expressed

As noted, Direxion also changed the way it’s expressing the funds’ costs.

The company is now disclosing so-called acquired fund fees that are incurred when an ETF buys other funds in its filing and, in its prospectus, expresses the tally of all the costs under “Total Annual Fund Operating Expenses After Expense Waiver/Reimbursement.”

Without the disclosure, the acquired fund fees would have come out of the ETF returns, according to O’Rourke.

“When we first did the filing, the acquired fund fees were zero, and then because we did this new filing, the SEC asked us to estimate what our acquired fund fees would be,” he said

The three existing Direxion funds and the changes to their expense ratios are as follows:

  • Direxion S&P 1500 RC Volatility Response Shares ETF (NYSEArca: VSPR), will have a net expense ratio of 0.62 percent, including a fee waiver of 2.29 percent. Its net expense ratio is now 0.45 percent.
  • Direxion S&P 500 RC Volatility Response Shares ETF (NYSEArca: VSPY) will have a net expense ratio of 0.52 percent, including a fee waiver of 1.64 percent. It currently has a net expense ratio of 0.45 percent.
  • Direxion S&P Latin America 40 RC Volatility Response Shares ETF (NYSEArca: VLAT) will have a net expense ratio of 0.83 percent, including a fee waiver of 2.30 percent. It currently has a net expense ratio of 0.45 percent.

 

Costs of the two funds that are in registration are as follows:

  • Direxion S&P 600 RC Volatility Response Shares, which doesn’t yet have a ticker, will come with a net expense ratio of 0.45 percent, including a 0.24 expense fee waiver
  • Direxion Nasdaq Volatility Response Shares (NYSEArca: QVOL) will have a net expense ratio of 0.65 percent, including a 0.09 percent fee waiver

 

 

 

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