Direxion Shares ETF Trust II intends to offer a series of exchange traded funds that seek daily leveraged investment results that correlate positively (or negatively) to 300% the daily return (or inverse return) of a target benchmark, generally a commodity-based or currency-based instrument. The Delaware statutory trust is organized into separate series that are subject to regulations as commodity pools under the Commodity Exchange Act, and their sponsor is subject to regulation as a commodity pool operator. None of the ETFs are a mutual fund or any other type of investment company under the Investment Company Act of 1940.
Direxion II filed its Form S-1 on July 20 (file no. 333-168227), registering common units of beneficial interest that will be separately offered for each fund. ETFS Collateralized Commodities Trust filed a Form S-1 on May 27 (333-167167) in connection with 18 initial ETFs that are intended to be used as short-term trading vehicles. The ETFS funds seek daily investment results which correspond to 100% or 200% of the daily performance of the specified commodity index.
The emergence of ETFs organized as a trust of commodity pools is a fairly recent experience. More commonly, an ETF trust has tended to be an open-end management investment company registered under the 1940 Act. Direxion Shares ETF Trust, a non-diversified series of mutual funds that seek to provide daily investment results much like Direxion II, filed a Registration Statement on Form N-1A on 9/16/08, file no. 811-22201.
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