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<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div>
<div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div><div style=" text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in the <font style="display: inline; font-weight: bold;">Dynamic HY Bond Fund's </font>summary section under the heading "Fees and Expenses of the Fund" is hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; 9.090909004211426px; vertical-align: text-top;">(1)</font></font></div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Acquired Fund Fees and Expenses</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.38%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; borader-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.73%</font></div></td></tr></table></div><div> </div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and the removal of the Shareholder Servicing Fee and the contractual fee waiver of the Management Fees.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(2)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(3)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style=" text-indent: 0pt; "><br/></div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$176</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$545</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$939</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$2,041</font></div></td></tr></table></div><div style=" text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in the <font style="display: inline; font-weight: bold;">U.S. Government Money Market Fund's</font> summary section under the heading "Fees and Expenses of the Fund" is hereby replaced with the following:</font></div><div style=" text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline;"><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.50%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">None</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.45%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Acquired Fund Fees and Expenses</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.04%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)(4)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.99%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(1)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect the removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(2)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(4)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">The Adviser has voluntarily agreed to waive its investment advisory fees and/or reimburse certain expenses of the Fund to the extent that it becomes necessary in order to maintain a positive yield. There is no guarantee that the Fund will be able to maintain a positive yield. The Adviser may withdraw this expense limitation at any time. The Adviser may recoup any such waived fees and/or reimbursed expenses within three years provided that such recoupment does not cause the Fund's seven-day yield to fall below 1%.</font></td></tr></table></div> <div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=""><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$101</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$315</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$547</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,213</font></div></td></tr></table></div>
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in the <font style="display: inline; font-weight: bold;">Dynamic HY Bond Fund's </font>summary section under the heading "Fees and Expenses of the Fund" is hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; 9.090909004211426px; vertical-align: text-top;">(1)</font></font></div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Acquired Fund Fees and Expenses</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.38%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; borader-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.73%</font></div></td></tr></table></div><div> </div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and the removal of the Shareholder Servicing Fee and the contractual fee waiver of the Management Fees.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(2)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(3)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style=" text-indent: 0pt; "><br/></div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$176</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$545</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$939</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$2,041</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0038
0.0173
176
545
939
2041
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and the removal of the Shareholder Servicing Fee and the contractual fee waiver of the Management Fees.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect the removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in the <font style="display: inline; font-weight: bold;">U.S. Government Money Market Fund's</font> summary section under the heading "Fees and Expenses of the Fund" is hereby replaced with the following:</font></div><div style=" text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline;"><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.50%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">None</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.45%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Acquired Fund Fees and Expenses</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.04%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)(4)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.99%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(1)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect the removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(2)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr><tr><td align="left" valign="top" width="4%"><font style="display: inline; "><font style=" vertical-align: text-top;">(4)</font></font></td><td valign="top" width="96%" style="text-align: justify;"><font style="display: inline; ">The Adviser has voluntarily agreed to waive its investment advisory fees and/or reimburse certain expenses of the Fund to the extent that it becomes necessary in order to maintain a positive yield. There is no guarantee that the Fund will be able to maintain a positive yield. The Adviser may withdraw this expense limitation at any time. The Adviser may recoup any such waived fees and/or reimbursed expenses within three years provided that such recoupment does not cause the Fund's seven-day yield to fall below 1%.</font></td></tr></table></div> <div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=""><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$101</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$315</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$547</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,213</font></div></td></tr></table></div>
0.005
0
0.0045
0.0004
0.0099
101
315
547
1213
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
137
428
739
0.0075
0.0025
1624
0.0035
0.0135
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
September 1, 2015
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
<div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXSLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund (DXSSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund (DXQLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bull 2X Fund (DXRLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Small Cap Bear 2X Fund (DXRSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Emerging Markets Bull 2X Fund (DXELX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Latin America Bull 2X Fund (DXZLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly China Bull 2X Fund (DXHLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly Commodity Bull 2X Fund (DXCLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bull 2X Fund (DXKLX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Direxion Monthly 7-10 Year Treasury Bear 2X Fund (DXKSX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">Dynamic HY Bond Fund (PDHYX)</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; font-weight: bold;">U.S. Government Money Market Fund (DXMXX)</font></div><div style="text-indent: 0pt;"><br/></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="font-variant: small-caps; display: inline; "><font style="display: inline; font-weight: bold;">Each a Series of</font> <font style="display: inline; font-weight: bold;">the Direxion Funds</font></font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"> </div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"></div><font style="display: inline; font-weight: bold;"> </font><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Supplement dated August 23, 2013 to the</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Summary Prospectus, Prospectus and</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Statement of Additional Information ("SAI"),</font></div><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">each dated December 28, 2012, as last supplemented July 26, 2013</font></div><font style="display: inline; font-weight: bold;"> </font><div style="text-indent: 0pt; "> </div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; "><font style="display: inline;">Effective September 1, 2013, the Board of Trustees (the "Board") of the Direxion Funds (the "Trust") and Rafferty Asset Management, LLC ("Rafferty"), the Trust's adviser, for the </font>Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly S&P 500<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bear 2X Fund, Direxion Monthly NASDAQ-100<font style="display: inline; vertical-align: text-top;"><sup>®</sup></font> Bull 2X Fund, Direxion Monthly Small Cap Bull 2X Fund, Direxion Monthly Small Cap Bear 2X Fund, Direxion Monthly Emerging Markets Bull 2X Fund, Direxion Monthly Latin America Bull 2X Fund, Direxion Monthly China Bull 2X Fund, Direxion Monthly Commodity Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bull 2X Fund, Direxion Monthly 7-10 Year Treasury Bear 2X Fund (collectively, the "Monthly Funds"), Dynamic HY Bond Fund and the U.S. Government Money Market Fund (each a "Fund" and, collectively with the Monthly Funds, the "Funds")<font style="display: inline;">, have agreed to the removal of the 0.25% Shareholder Servicing Fee applicable to each Fund.</font></font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Rafferty has agreed to, and the Board has approved, a reduction in the Operating Services Fee payable to Rafferty by each Fund, except the U.S. Government Money Market Fund, pursuant to the Operating Services Agreement described in each Fund's Prospectus. As a result, the Operating Services Fee for each Monthly Fund will change from 0.65% to 0.35% and the Operating Services Fee for the Dynamic HY Bond Fund will change from 0.50% to 0.35%.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In connection with these fee reductions, the Board has agreed to terminate the 0.15% contractual fee waiver of the Management Fee applicable to the Dynamic HY Bond Fund.</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">In accordance with these changes, as described above, as of September 1, 2013:</font></div><div style=" text-indent: 0pt; "> </div><div style=" text-indent: 0pt; "></div><div align="justify" style=" text-indent: 36pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">The "Annual Fund Operating Expenses" table and corresponding "Example" appearing in each <font style="display: inline; font-weight: bold;">Monthly Fund's</font> summary section under the heading "Fees and Expenses of the Fund" are hereby replaced with the following:</font></div><div style="text-indent: 0pt; "><br/></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; font-weight: bold;">Fees and Expenses of the Fund</font></div><div align="justify" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; ">This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.</font></div><div style=" text-indent: 0pt; "><br/></div><div align="left" style="text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Annual Fund Operating Expenses</font> (expenses that you pay each year as a percentage of the value of your investment<font style="display: inline; vertical-align: text-top;">(1)</font></font></div><div align="center"><table align="center" cellpadding="1" cellspacing="0" width="90%"><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Management Fees</font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.75%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Distribution and/or Service (12b-1) Fees</font></div></td><td valign="top" width="16%"><font style="display: inline;"> </font></td><td valign="top" width="12%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.25%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">Other Expenses (Operating Services Fee)<font style="display: inline; vertical-align: text-top;">(2)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 2px; border-bottom-style: solid;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">0.35%</font></div></td></tr><tr><td align="left" valign="top" width="35%"><div align="left" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; 10pt;">Total Annual Fund Operating Expenses<font style="display: inline; vertical-align: text-top;">(3)</font></font></div></td><td valign="top" width="16%"><font style="display: inline; "> </font></td><td valign="top" width="12%" style="border-bottom-color: black; border-bottom-width: 4px; border-bottom-style: double;"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">1.35%</font></div></td></tr></table></div> <div align="center"><table cellpadding="1" cellspacing="0" width="90%" ><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(1)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(2)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Rafferty Asset Management, LLC ("Rafferty" or "Adviser") has contractually agreed to pay all expenses of the Fund through September 1, 2015 other than the following: management fees, distribution and/or service fees, shareholder servicing fees, acquired fund fees and expenses, taxes, leverage interest, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation or other expenses outside the typical day-to-day operations of the Fund. This Operating Services Agreement may be terminated at any time by the Board of Trustees.</font></td></tr><tr><td align="left" valign="top" width="3%"><font style="display: inline; "><font style="vertical-align: text-top;">(3)</font></font></td><td valign="top" width="78%" style="text-align: justify;"><font style="display: inline; ">Total Annual Fund Operating Expenses for the Fund do not correlate to the "Ratios to Average Net Assets: Net Expenses" provided in the "Financial Highlights" section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.</font></td></tr></table></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "> </font></div><div align="justify" style=" text-indent: 0pt; margin-left: 36pt; margin-right: 36pt;"><font style="display: inline; "><font style="display: inline; font-weight: bold;">Example. </font>The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font></div><div style="text-indent: 0pt; "><br/></div><div align="center" style=" "><table cellpadding="1" cellspacing="0" width="90%"><tr><td valign="top" width="17%"><font style="display: inline; "> </font></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">1 Year</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">3 Years</font></div></td><td valign="bottom" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">5 Years</font></div></td><td valign="bottom" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">10 Years</font></div></td></tr><tr><td valign="top" width="17%"><div align="justify" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-weight: bold;">Investor Class</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$137</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$428</font></div></td><td valign="top" width="13%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$739</font></div></td><td valign="top" width="14%"><div align="center" style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; ">$1,624</font></div></td></tr></table></div>
0.0075
0.0025
0.0035
0.0135
137
428
739
1624
<b>Fees and Expenses of the Fund</b>
This table describes the fees and expenses you may pay if you buy and hold shares of the Fund.
<b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment
The Annual Operating Expenses of the Fund have been restated to reflect a reduction in Operating Services Fee and removal of Shareholder Servicing Fee.
Total Annual Fund Operating Expenses for the Fund do not correlate to the “Ratios to Average Net Assets: Net Expenses” provided in the “Financial Highlights” section of the statutory prospectus, which reflects the operating expenses of the Fund and does not include acquired fund fees and expenses.
<b>Example.</b>
The example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
September 1, 2015