DXCTX — Direxion Indexed Commodity & Income Strategy Fund

DXCTX Fund Overview

DXCTX — Direxion Indexed Commodity & Income Strategy Fund is a US mutual fund managed by Direxion Funds, categorised as Commodity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

• Type: US mutual fund
• Manager: Direxion Funds
• Category: Commodity
• Assets under management: $5.91M
• Ticker: DXCTX
• SEC CIK: 0001040587
• SEC series ID: S000022439
• Share class ID: C000064568

DXCTX Investment Objective and Strategy

Direxion Indexed Commodity & Income Strategy Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Direxion Funds.

Investment objective

The Direxion Indexed Commodity & Income Strategy Fund (formerly, the Direxion Indexed Commodity Strategy Fund) (the Fund) seeks investment results, before fees and expenses, that track the performance of the Auspice Broad Commodity Index (the Index).

Principal investment strategy

The Fund is managed to track the performance of the Index. The Fund will invest up to 25% of its total assets in a wholly owned and controlled subsidiary (the Subsidiary). The Fund, directly and/or indirectly through its Subsidiary, primarily invests in a combination of commodity futures, swap contracts, and fixed income securities. The Funds investments in fixed-income securities will typically include short-term U.S. government securities, short-term investment grade fixed-income securities, money market instruments, overnight and fixed-term repurchase agreements, cash, and other cash equivalents that have terms-to-maturity of less than 397 days. The Fund expects to use the fixed-income securities as investments and as collateral for its commodity-linked derivative exposure on a day-to-day basis.

The Fund may also invest in certain exchange-traded funds (ETFs) and other investment companies that provide exposure to commodities and fixed income securities. The Index attempts to capture price trends in the commodity markets by using a quantitative methodology to track the prices of a diversified portfolio of 12 commodity futures contracts, or components. Each of the 12 components of the Index is positioned either long or flat (no position) by the Index, depending upon the direction of the price trend for that individual component. The position size that the Index takes in any component is dependent on the historical volatility of that component and the total Index value. As the volatility of a component increases, the Indexs position in the commodity should be expected to decrease and may decrease to zero.

As the volatility of a component decreases, the Indexs position in the commodity should be expected to increase. The Index does not limit positions in any one commodity and may modify its position in a component from long to flat, or vise versa, as frequently as daily based on the prevailing price trends of the component. At times, the Funds commodity exposure could be limited or zero (i.e., when all 12 components commodity prices are not trending up). The 12 components are grouped into 3 sectors: (1) Metals Sector, comprised of Copper, Gold, and Silver; (2) Agricultural Sector, comprised of Corn, Cotton, Soybeans, Sugar, and Wheat; and (3) Energy Sector, comprised of Crude Light, Gasoline, Heating Oil, and Natural Gas. As of May 31, 2018, the Index had the following percentage allocations to each sector: (1) Agriculture: 51.9%; (2) Energy: 29.8%; and (3) Metals: 0%.

The remaining 18.3% of the allocation represents the components that the Index has positioned as flat or no position. This amount is invested in fixed-income securities. As a result of the Indexs methodology, the Index may at times have leveraged exposure to one or more sectors. The Index on a rolling basis will replace expiring futures contracts based on an optimization process that selects a contract from the universe of all exchange-traded futures contracts within the next 13-month period. The Index rebalances the weight of each component monthly. Thus, the Fund will generally rebalance following each month-end but may change its position in a component more often to track the Index. The Subsidiary invests principally in commodity and financial futures and swap contracts, as well as certain fixed-income investments intended to serve as margin or collateral for the Subsidiarys derivatives positions.

The Funds investment in the Subsidiary may not exceed 25% of the value of its total assets at the end of each quarter of its taxable year. Unlike the Fund, the Subsidiary may invest without limitation in commodity-linked derivatives, though the Subsidiary will comply, on a consolidated basis, with the same asset coverage requirements with respect to its investments in commodity-linked derivatives that apply to the Funds transactions in these instruments. The Subsidiary, on a consolidated basis is also subject to the same requirements relating to portfolio leverage, liquidity, and the timing and method of valuation of portfolio investments described elsewhere in this Prospectus and in the Statement of Additional Information. The Fund is the sole shareholder of the Subsidiary and does not expect shares of the Subsidiary to be offered or sold to other investors.

The use of commodity and financial futures and swap contracts will have the economic effect of financial leverage. Financial leverage magnifies the exposure to the swings in prices of an asset class underlying a derivative contract and results in increased volatility, which means that the Fund will have the potential for greater gains, as well as the potential for greater losses, than if leverage was not used. Leveraging tends to magnify, sometimes significantly, the effect of any increase or decrease in exposure to an asset class and may cause the Funds net asset value to be volatile. The Fund is non-diversified and may be invested in a limited number of issuers. References to the Fund include the Subsidiary.

DXCTX Costs and Fees

DXCTX costs about $133 per $10,000 invested per year in fund expenses.

• Net expense ratio: 1.33%
• Gross expense ratio: 1.97%
• Portfolio turnover: 0%
• Brokerage commissions: 4.94 bps of average net assets (SEC N-CEN)

DXCTX Cashflows

Over the 12 months to 2020-01, Direxion Indexed Commodity & Income Strategy Fund had net inflows of $10.07M, from monthly SEC N-PORT filings.

DXCTX Debt Constituents

No individual debt constituents are reported in Direxion Indexed Commodity & Income Strategy Fund's latest SEC N-PORT filing.

DXCTX Prospectus and SEC Filings

Official Direxion Indexed Commodity & Income Strategy Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

• Prospectus (485BPOS) — filed 2019-03-07
• Prospectus (485BPOS) — filed 2018-07-13
• Prospectus (485BPOS) — filed 2018-03-12
• Portfolio holdings (N-PORT) — filed 2020-03-30
• Portfolio holdings (N-PORT) — filed 2019-12-26
• Annual census (N-CEN) — filed 2020-01-14
• Annual census (N-CEN) — filed 2019-01-11

Related Funds

Other Commodity funds tracked on ABC INVEST:

• VanEck Vectors Gold Miners ETF (GDX)
• VanEck Vectors Junior Gold Miners ETF (GDXJ)
• Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC)
• PIMCO CommoditiesPLUS Strategy Fund (PCLAX)
• First Eagle Gold Fund (SGGDX)

Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.