Direxion Shares ETF Trust has announced the closure and liquidation of three of its exchange-traded funds (ETFs) due to their inability to attract sufficient investment assets. The decision, recommended by the Funds' adviser, Rafferty Asset Management, LLC, was deemed to be in the best interest of the Funds and their shareholders by the Board of Trustees.
The ETFs set to close are the Direxion Hydrogen ETF (HJEN), Direxion Moonshot Innovators ETF (MOON), and Direxion Daily Global Clean Energy Bull 2X Shares (KLNE). The Funds will cease trading on the NYSE Arca as of the close of regular trading on July 19, 2024, and will no longer accept purchase orders after this date.
For shareholders, the window to sell their holdings in these Funds remains open until the Closing Date, although customary brokerage charges may apply. However, from July 19, 2024, to July 30, 2024, known as the Liquidation Date, selling shares may only be possible through certain broker-dealers, with no guarantee of a market for the Funds' shares during this period. Starting June 21, 2024, the Funds will begin liquidating their portfolios, increasing cash holdings and deviating from their investment objectives and strategies.
On or around the Liquidation Date, the Funds will liquidate their remaining assets and distribute cash pro rata to all shareholders who have not sold their shares. These distributions are taxable events and may include accrued capital gains and dividends. The net asset value of each Fund will reflect the costs associated with closing, and the Funds will terminate once distributions are complete.
Direxion's decision to close these ETFs underscores the challenges faced by investment funds in maintaining sufficient assets under management. It highlights the importance of strategic asset management and the need for continuous evaluation of fund performance.
For more information on Direxion and its range of ETF solutions, visit www.direxion.com.
