DIREXION FUNDS AMENDED AND RESTATED OPERATING EXPENSE LIMITATION AGREEMENT
AMENDED
AND RESTATED
THIS AMENDED AND RESTATED OPERATING
EXPENSE LIMITATION AGREEMENT (the “Agreement”) is effective as of January 1,
2009 by and between DIREXION FUNDS, a Massachusetts business trust (the
“Trust”), on behalf of each of the funds listed on Appendix A (the
“Funds”), each a series of the Trust, and the adviser of the Funds, Xxxxxxxx
Asset Management, LLC, a New York limited liability corporation (the
“Adviser”).
WHEREAS, the Adviser renders advice and
services to the Funds pursuant to the terms and provisions of an Investment
Advisory Agreement between theTrust and the Adviser (the “Investment Advisory
Agreement”); and
WHEREAS, the Funds are responsible for,
and have assumed the obligation for, payment of certain expenses pursuant to the
Investment Advisory Agreement that have not been assumed by the Adviser;
and
WHEREAS, the Adviser desires to limit
the Funds’ Total Annual Fund Operating Expenses (as that term is defined below
in Paragraph 2 of this Agreement) pursuant to the terms and provisions of
this Agreement, and the Trust (on behalf of the Funds) desires to allow the
Adviser to implement those limits;
NOW THEREFORE, in consideration of the
covenants and the mutual promises hereinafter set forth, the parties, intending
to be legally bound hereby, mutually agree as follows:
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1.
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Limit On Total Annual
Fund Operating Expenses. The Adviser hereby agrees to
limit each Fund’s current Total Annual Fund Operating Expenses to an
annual rate, expressed as a percentage of each Fund’s respective average
daily net assets to the amounts listed in Appendix A (the “Annual
Limits”). In the event that the current Total Annual Fund
Operating Expenses of each Fund, as accrued each month, exceed its Annual
Limit, the Adviser will pay to that Fund, on a monthly basis, the excess
expense within 30 days of being notified that an excess expense payment is
due.
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2.
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Definition. For
purposes of this Agreement, the term “Total Annual Fund Operating
Expenses” with respect to a Fund is defined to include all expenses
necessary or appropriate for the operation of the Fund, including the
Adviser’s advisory fee and other expenses described in the Investment
Advisory Agreement and any Rule 12b-1 fees, but does not include, as
applicable, among other expenses, any front-end or contingent deferred
sales loads, taxes, leverage interest, dividends or interest on short
positions, other interest expenses, brokerage commissions, expenses
incurred in connection with any merger or reorganization, Acquired Fund
Fees and Expenses, and extraordinary expenses such as
litigation. For purposes of this paragraph 2, “Acquired Fund
Fees and Expenses” means the indirect fees and expenses that a Fund incurs
from investing in the shares of other registered or unregistered
investment companies.
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A-1
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3.
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Reimbursement of Fees
and Expenses. The Adviser retains its right to receive
reimbursement of any excess expense payments paid by it pursuant to this
Agreement in the three previous years if the recovery does not cause a
Fund to exceed any expense limitations contractually imposed by the
Adviser.
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4.
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Term. This
Agreement shall be in effect for each Fund until the termination date
indicated on Appendix A, unless sooner terminated as provided in
Paragraph 5 of this Agreement.
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5.
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Termination. This
Agreement may be terminated at any time, and without payment of any
penalty, by the Board of Trustees of the Trust, on behalf of one or more
Funds, upon notice to the Adviser. This Agreement may not be
terminated by the Adviser, on behalf of one or more Funds, without the
consent of the Board of Trustees of the Trust. This Agreement
automatically will terminate with respect to a Fund if the Investment
Advisory Agreement is terminated with respect to such Fund, with such
termination effective upon the effective date of the Investment Advisory
Agreement’s termination. No shareholder approval is required to
terminate or amend this Agreement.
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6.
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Assignment. This
Agreement and all rights and obligations hereunder may not be assigned
without the written consent of the other
party.
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7.
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Severability. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute or rule, or shall be otherwise rendered invalid, the
remainder of this Agreement shall not be affected
thereby.
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8.
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Governing
Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving
effect to the conflict of laws principles hereof; provided that nothing
herein shall be construed to preempt, or to be inconsistent with, any
applicable federal law, regulation or rule, including the Investment
Company Act of 1940, and the Investment Advisers Act of 1940, and any
rules an regulations promulgated
thereunder.
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9.
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Other
Agreements. This Agreement supersedes any prior
Operating Expense Limitation Agreement between the parties relating to the
fiscal periods covered by this
Agreement.
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10.
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Amendments. The
parties may amend Appendix A to this Agreement to add or delete Funds and
update the termination date of this Agreement with respect to a Fund by
including such changes in an updated version Appendix
A.
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A-2
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed.
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XXXXXXXX
ASSET MANAGEMENT, LLC
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Date:
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Date:
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A-3
APPENDIX
A
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FUND
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Investor
Class
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TERMINATION
DATE
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FUND
STATUS
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1.
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S&P
500®
Bull 2.5X Fund
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1.95%
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31-Dec-09
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Open
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2.
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S&P
500®
Bear 2.5X Fund
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1.95%
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31-Dec-09
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Open
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3.
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NASDAQ-100®
Bull 2.5X Fund
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1.95%
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31-Dec-09
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Open
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4.
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NASDAQ-100®
Bear 2.5X Fund
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1.95%
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31-Dec-09
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Open
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5.
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Dollar
Bull 2.5X Fund
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1.95%
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31-Dec-09
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Open
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6.
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Dollar
Bear 2.5X Fund
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1.95%
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31-Dec-09
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Open
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7.
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Latin
America Bull 2X Fund
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1.95%
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31-Dec-09
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Open
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8.
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U.S.
Government Money Market Fund
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1.25%
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31-Dec-09
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Open
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9.
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Small
Cap Bull 2.5X Fund
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1.95%
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31-Dec-09
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Open
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10.
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Small
Cap Bear 2.5X Fund
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1.95%
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31-Dec-09
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Open
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11.
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Emerging
Markets Bull 2X Fund
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1.95%
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31-Dec-09
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Open
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12.
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Emerging
Markets Bear 2X Fund
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1.95%
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31-Dec-09
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Open
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13.
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Developed
Markets Bull 2X Fund
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1.95%
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31-Dec-09
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Open
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14.
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Developed
Markets Bear 2X Fund
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1.95%
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31-Dec-09
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Open
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15.
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Commodity
Bull 2X Fund
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1.95%
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31-Dec-09
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Open
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16.
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10
Year Note Bull 2.5X Fund
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1.95%
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31-Dec-09
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Open
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17.
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10
Year Note Bear 2.5X Fund
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1.95%
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31-Dec-09
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Open
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18.
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Dynamic
XX Xxxx Fund
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1.95%
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31-Dec-09
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Open
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19.
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HY
Bear Fund
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1.95%
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31-Dec-09
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Open
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20.
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China
Bull 2X Fund
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1.95%
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31-Dec-09
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Open
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21.
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Commodity
Trends Strategy Fund
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2.00%
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31-Dec-09
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Open
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22.
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Financial
Trends Strategy Fund
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1.90%
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31-Oct-09
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Open1
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23.
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Direxion/Wilshire
Dynamic Fund
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1.55%
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31-Oct-09
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Open1
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A-4
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FUND
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Service
Class
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TERMINATION
DATE
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FUND
STATUS
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1.
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Financial
Trends Strategy Fund
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2.40%
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31-Oct-09
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N/A
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2.
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Direxion/Wilshire
Dynamic Fund
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2.05%
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31-Oct-09
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N/A
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3.
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Commodity
Trends Strategy Fund
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2.50%
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31-Dec-09
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N/A
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FUND
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Institutional
Class
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TERMINATION
DATE
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FUND
STATUS
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1.
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Financial
Trends Strategy Fund
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1.40%
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31-Oct-09
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N/A
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2.
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Direxion/Wilshire
Dynamic Fund
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1.05%
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31-Oct-09
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N/A
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3.
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Commodity
Trends Strategy Fund
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1.35%
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31-Dec-09
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Open1
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1To become operational in
February 2009.
Dated:
November 6, 2008
Amended:
February 11, 2009
A-5
