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Fund Information
The Commodity Trends Strategy Fund |
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How you may benefit from long/short positions in the commodities universeThe Commodity Trends Strategy Fund is one of the only funds on the market today that seeks to match the performance of the Commodity Trends Indicator (CTI), offering the ability to position each sector either long or short. Most traditional commodity funds only provide long exposure to commodities. The problem? A long-only exposure tends to limit commodities' potential to contribute to a portfolio's long-term performance, due to the extended cyclical nature of commodities—i.e., $1 invested in commodities in 1956 is worth 54 cents (inflation-adjusted) today1. The Fund's multi-directional nature not only can provide a hedge against inflation, but also deflation. Furthermore, the Fund's tracking of the CTI can potentially provide investors with an opportunity to take advantage of both rising and falling commodity futures markets, with relatively low volatility. |
Over time, long-only commodity strategies have not proven to provide substantial gains because:
- cyclical declining trends can cause significant drawdowns;
- gains tend to be concentrated in only a few sectors;
- appreciation is sporadic and cyclical; and
- gains tend to be lower than stocks and bonds over time.
The following chart illustrates the CTI's performance results from 2004 through 2009, along with the performance of the S&P GSCI™ (Goldman Sachs Commodity Index) and the DJAIG CI (Dow Jones UBS Commodity Index).2
*The CTI is a long short index while the S&P GSCI and DJUBS CI are long only indices. This chart is meant to demonstrate the differences between long only and long/short indices.
1 Based on data provided by the Chart Store for the Reuters/CRB Continuous Futures Index for the period 11/20/56 - 12/31/09.
2 Past performance, especially statistical information, is not necessarily indicative of future results.
3 Standard Deviation is a measure of the dispersion of a set of data from its mean.
4 The expected return of that asset, less the rate of return on a risk-free asset. This rate is denominated by the risk of that asset, which is expressed as the standard deviation of returns.
5 The greatest percent decline from a previous high.
| The Commodity Trends Startegy Fund |
Why Commodities |
Why a Long/Short Commodity Strategy? |
Why Invest in the fund? |
Advantages |
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 principal risks of investing in the Commodity Trends Strategy Fund are risks of investing in commodity-linked derivatives, risks of investing in wholly owned subsidiary, high portfolio turnover, tax risk, the risk of tracking error, risks of aggressive investment techniques, leverage risk, derivatives risks, counterparty risks, risk of non-diversification, risks of investing in other investment companies and ETFs, adverse market conditions, risks of investing in equity securities, credit risk, derivatives risk, risks of shorting instruments, risks of volatile markets, risks of investing in a Wholly Owned Subsidiary and concentration risk.
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