Direxion files for a memory ETF and two electricity-futures funds
Shares cannot be sold until the Oct. 14 registration is effective, and the tickers, exchanges and fees are still blank.
Key takeaways
Direxion Shares ETF Trust filed a preliminary prospectus on Oct. 14, marked subject to completion, for three exchange-traded funds that are not trading: one for memory-chip stocks and two for U.S. electricity futures.
In an Oct. 7 release, Direxion said it is best known for leveraged and inverse ETFs. None of the three funds in this prospectus would seek a daily multiple of an index.
The prospectus, filed with the Securities and Exchange Commission (SEC), says the information "is not complete and may be changed." Rafferty Asset Management is named as the adviser.
What the three funds would hold
The Direxion Memory ETF would seek, before fees and expenses, to track an index the draft still labels, in brackets, the Global Memory Equal Weight Index. The prospectus describes 15 globally listed companies that derive 50% or more of revenue from specified memory and storage businesses. Equal weighting is still in brackets too, and the index would be reconstituted quarterly.
Under normal circumstances the fund would put at least 80% of net assets, plus borrowings for investment, into the index securities or into swaps and futures with similar economics. It would be non-diversified.
The other two funds would not buy utility stocks. They would use standardized, cash-settled electricity futures listed on ICE Futures U.S., the Intercontinental Exchange's U.S. futures market.
"AI Powered" is in both names. The prospectus does not describe a computer picking the contracts.
It says the futures are meant to give exposure to electricity prices based on structural demand, including AI data centers, industrial electrification and population growth, which it calls distinct from short-term or weather-driven fluctuations. The same document warns that weather, outages, fuel costs and grid constraints can still move electricity prices sharply.
The split is in the indexes. The Direxion AI Powered Electricity Commodity ETF would track the ICE U.S. Prompt Power Total Return Index, six front-month cash-settled electricity futures, meaning the contracts nearest to expiration. The Direxion AI Powered Electricity Commodity - Long Dated ETF would track the ICE U.S. National Power Index, 72 cash-settled contracts, six expiring each month for 12 months.
The prospectus names six markets for those contracts. One is PJM Interconnection's Western Hub, which the prospectus says covers 13 mid-Atlantic and Midwestern states. The others are the Midcontinent Independent System Operator (MISO), the Electric Reliability Council of Texas (ERCOT), the California Independent System Operator (CAISO), the New York Independent System Operator (NYISO) and the New England Independent System Operator (ISO-NE).
Each electricity fund's investment in a wholly owned Cayman Islands subsidiary may not exceed 25% of total assets at the end of each quarter of its taxable year, except in certain circumstances. The filing says that subsidiary is not registered with the SEC under the Investment Company Act of 1940, so the fund would not receive all of the protections offered to shareholders of registered investment companies.
On each fee table, the only completed line is a distribution and service (12b-1) fee of 0.00%. Management fees, other expenses, acquired-fund fees, total operating expenses and the expense cap are blank. An expense-limitation agreement runs through Sept. 1, 2028, with the capped rate still empty.
One memory fund holds $19.1 billion
Roundhill Investments' Roundhill Memory ETF, DRAM, already holds $19.1 billion as of Oct. 16. It is actively managed, charges 0.65%, and began trading on April 2.
An index memory fund is already trading, and it is not that size. Yorkville's Yorkville America Next Generation Memory Index ETF, NRAM, tracks the YA MarketVector Next Generation Memory Index, charges 0.60%, and holds $1.5 million as of Oct. 15. Kurv's Kurv Memory Select ETF, KMEM, also active and also at 0.65%, holds $24.5 million as of Oct. 15. Other memory funds are listed too, including Amplify's Amplify Top 10 Asia Memory ETF, AHBM, which tracks the Akros Asia Memory Semiconductor Top 10 Index and holds $6.2 million as of Oct. 16.
DRAM holds $19.1 billion; the other three are in the millions
The difference in the filing is that screen: 15 names, a 50% revenue screen, quarterly reconstitution, and equal weight still in brackets. The filing does not change DRAM, KMEM, NRAM or AHBM.
The listed electricity-futures fund holds $630,000
Skylar Capital Management's Skylar Electricity Futures ETF, MWHS, has an inception date of June 26, charges 0.95%, and holds $630,000 as of Oct. 15, less than four months after inception. It holds cash and power futures, not utility shares. Direxion's pair, one in front-month contracts and one spanning 12 months of expirations, is not listed. With the fees still blank, there is no finished cost to set beside that 0.95%.
ETFs in this story
Frequently asked questions
Can investors buy these Direxion funds yet?
Shares cannot be sold until the Oct. 14 registration is effective, and the tickers, exchanges and fees are still blank.
Would these funds use daily leverage?
None of the three funds in this prospectus would seek a daily multiple of an index.
What would the electricity funds hold?
They would use standardized, cash-settled electricity futures listed on ICE Futures U.S., not utility stocks.
Does AI Powered mean a computer picks the contracts?
The prospectus does not describe a computer picking the contracts, despite AI Powered appearing in both names.
