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Rafferty Asset Management closing Direxion Airline Shares ETF


The Board of Trustees of the Direxion Shares ETF Trust, based upon the recommendation of Rafferty Asset Management, LLC, the Trust’s adviser, has decided to close the Direxion Airline Shares Fund (ticker:FLYX).

Due to the fund’s low levels of assets, Rafferty does not believe that it can continue to conduct the Fund’s business and operations in an economically efficient manner. As such, the Board concluded that it would be in the best interests of the Fund and its shareholders to liquidate and terminate the Fund. Shares of the fund will cease trading on the NYSE Arca, Inc. and close to purchases by investors as of the close of regular trading on 10 October, 2011. Customary brokerage charges may apply to any transactions prior to that time.

"Direxion’s core business and success has been focused in the leveraged and inverse ETF, and other alternative fund space. With declining interest in a non-leveraged airline industry ETF, we feel it is in the best interest of the shareholders to close the fund and stick to the product for which we are best known," says Dan O’Neill (pictured), President and CIO of Direxion. "Direxion’s focus has always been on providing investors with innovative investment products. We will continue to deliver investment options that help investors capitalise on opportunities in all market conditions."

Between 10 October, 2011 and 17 October, 2011, the fund will be in the process of closing down and liquidating its portfolios. This process will result in the fund not tracking its underlying indexes and its cash holdings increasing, which may not be consistent with the fund’s stated investment objective and strategy. Following the close of trading on 10 Oct, 2011 through 17 Oct, 2011, shareholders may only be able to sell their shares to certain broker-dealers and there is no assurance that there will be a market for the Fund during this time period.

Shareholders retaining fund shares on 17 Oct, 2011 will have their fund shares redeemed automatically at that time and will receive cash in an amount equal to the net asset value of their shares as of 4:00 pm Eastern Time on 17 Oct, 2011. These payments to shareholders will include accrued capital gains and dividends, if any. The net asset value as calculated will reflect the costs of closing the fund.

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