Item 2 of an ETF's summary prospectus states the objective in one sentence, and that sentence decides what every later figure means. The Vanguard S&P 500 ETF summary prospectus dated 28 April 2026 says the fund seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks, and prints total annual fund operating expenses of 0.03 percent. The Direxion Daily S&P 500 Bull 3X ETF summary prospectus dated 27 February 2026 says the fund seeks daily investment results, before fees and expenses, of 300 percent of the daily performance of the same index, and prints 0.95 percent. Same index. One word separates the two objectives, and the word is daily.

Item 2 is one sentence, and the rest of the document answers to it

SEC Form N-1A fixes the order of a fund prospectus. In Part A, Item 2 is the Risk/Return Summary: Investment Objectives/Goals, Item 3 is the Fee Table, and Item 4 covers Investments, Risks, and Performance; Item 9 restates the objective alongside the principal investment strategies, the related risks and the disclosure of portfolio holdings. A price chart carries none of that. It carries where the fund has been.

Vanguard's Item 2 sentence names a benchmark and stops. Its strategy section commits the fund to holding at least 80 percent of net assets in the stocks that make up the S&P 500 and to holding each stock in approximately its index weight, and its portfolio turnover rate for the most recent fiscal year was 2 percent (summary prospectus, 28 April 2026). Direxion's Item 2 sentence names a multiple and a period, and the same page adds that the fund does not seek its stated objective over any period other than a trading day (summary prospectus, 27 February 2026). An index is a measurement and a fund is a product, a gap that sets the limits of tracking.

A daily objective resets every night

A daily multiple applies to one day, then starts again from the new balance. FINRA's page on leveraged and inverse exchange-traded products runs the arithmetic: $100 in a 2x product falls 20 percent when the index falls 10 percent, to $80, then rises 20 percent when the index rises 10 percent, to $96, while the index itself ends at 99. Over two days the product lost four times what the index lost. The same page records that the great majority of geared products carry a daily objective and reset their exposure each day, at factors of 1.5x, 2x and 3x on the long side. The longer path arithmetic extends that to multi-week runs.

The Direxion prospectus prints the effect as a table of estimated one-year outcomes. At 25 percent index volatility, a flat year for the index estimates to minus 17.1 percent for the fund, and a 10 percent index year estimates to 10.3 percent rather than 30 percent (summary prospectus, 27 February 2026). That page also records the index's annualized volatility at 16.96 percent for the five years ended 31 December 2025, against an annualized index return of 14.42 percent over the same five years.

Item 3 prints the fund's own ten-year cost

Form N-1A fixes the Example that sits under the fee table: $10,000 invested, a 5 percent return each year, operating expenses unchanged, and costs shown for one, three, five and ten years. Every registered fund runs the identical assumptions, so the four numbers compare across prospectuses without adjustment.

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Item 3 lineVanguard S&P 500 ETFDirexion Daily S&P 500 Bull 3X ETF
Total annual fund operating expenses0.03%0.95%, or 0.84% after the expense cap
Example cost on $10,000 over ten years$39$1,156
Portfolio turnover, most recent fiscal year2%71%

The left column comes from the 28 April 2026 Vanguard summary prospectus; the right column from the 27 February 2026 Direxion summary prospectus, which states that its turnover rate excludes derivative transactions and that the traded total therefore runs higher.

Example: $10,000 for ten years, priced by each fund's own table

This example is a mechanism, not a strategy. Take the two Item 3 Examples exactly as filed, under Form N-1A's single set of assumptions. Ten years of the tracking objective costs $39 on $10,000. Ten years of the daily 300 percent objective costs $1,156 on the same $10,000. The difference is $1,117, which is 11.2 percent of the starting amount, before any market move at all. Neither figure includes the brokerage charges that buy and sell the shares; those sit outside the fund's fee table and on the broker's own schedule.

The one-day loss limit is printed above the fee table

Direxion's summary prospectus states, ahead of Item 2, that an investor could lose the full principal value of the investment within a single day if the index loses more than 33 percent in one day (summary prospectus, 27 February 2026). Three times a 33 percent one-day index fall is 99 percent of the position. The tracking prospectus carries no equivalent sentence, because it carries no daily multiple to reset.

Source references

Primary sources used for this guide. Follow the links for the original scope, definitions and conditions.