Direxion Shares ETF Trust - Direxion Daily AAPL Bear 1X Shares (AAPD)

Overview

The Direxion Daily AAPL Bear 1X Shares (AAPD) seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the daily performance of the common shares of Apple Inc. (AAPL). It is designed for investors seeking a single day's exposure to the inverse performance of AAPL and should not be used for long-term investing.

Reputation and Reliability

Direxion is a well-known issuer specializing in leveraged and inverse ETFs. They are generally considered reliable but their products are designed for sophisticated investors.

Management Expertise

Direxion has a dedicated team managing various specialized ETFs, possessing expertise in structuring and managing leveraged and inverse products.

Goal

To seek daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the daily performance of the common shares of Apple Inc. (AAPL).

Investment Approach and Strategy

Strategy: The ETF uses derivatives such as swap agreements to achieve its inverse daily return objective tied to the performance of Apple Inc. stock.

Composition The ETF primarily holds swap agreements and other derivative instruments designed to provide the inverse daily performance of Apple Inc. common stock.

Market Share: The market share is very niche focusing on inverse AAPL performance, making comparison to broad market ETFs irrelevant.

Total Net Assets (AUM): 16340000

Key Competitors

• ProShares Short QQQ (PSQ)
• MicroSectors FANG+ Index -3X Inverse Leveraged ETN (FNGD)
• Direxion Daily Technology Bear 3X Shares (TECS)

Competitive Landscape

The competitive landscape consists of other inverse and leveraged ETFs. AAPD's advantage lies in its specific focus on Apple, but this also makes it less diversified and more susceptible to AAPL-specific news. Compared to broader tech or market inverse ETFs, it's more targeted but carries higher concentration risk.

Historical Performance: Due to its inverse and daily reset nature, long-term historical performance is not meaningful and will likely show significant erosion of capital. Past performance is not indicative of future results.

Benchmark Comparison: The ETF aims to provide the inverse of AAPL's *daily* performance. Benchmark comparison should be done daily against the inverse return of AAPL.

Expense Ratio: 0.95

Average Trading Volume

The ETF has an average daily trading volume of approximately 29000, indicating moderate liquidity.

Bid-Ask Spread

The bid-ask spread is typically around 0.34%, which is moderately high due to the leveraged nature of the ETF.

Market Environment Factors

AAPD's performance is affected by factors influencing Apple's stock price, including tech sector trends, economic conditions, and company-specific news. Changes in investor sentiment towards AAPL significantly impact AAPD's value.

Growth Trajectory

The growth trajectory of AAPD is not applicable, because it's designed for short-term use. The ETF's value will continually be eroded because it's tracking a one day inverse return.

Competitive Edge

AAPD's advantage lies in its specific focus allowing traders to precisely bet against AAPL's daily performance. This targeted approach is valuable for short-term traders with specific views on Apple. It offers a simple way to express a bearish short-term view on AAPL without directly shorting the stock. However, it is not suitable for long-term investments due to the daily reset and associated compounding effects.

Volatility

The ETF is highly volatile due to its inverse nature. As an inverse product, it amplifies the daily volatility of Apple stock.

Market Risk

The ETF is exposed to market risk related to Apple. This includes risk of unforeseen negative news, decreased demand, and systemic market risks. Due to the daily reset, it is not designed to track the inverse of Apple over long periods, it is meant for day traders.

Ideal Investor Profile

The ideal investor is a sophisticated, short-term trader who understands the risks of leveraged and inverse ETFs and has a bearish view on Apple for a single trading day.

Market Risk

AAPD is suitable for active traders with a short-term focus. It is not suitable for long-term investors or passive index followers due to the daily reset feature and compounding effect, which can lead to significant losses over time.

Direxion Daily AAPL Bear 1X Shares (AAPD) is a specialized ETF designed for sophisticated short-term traders seeking to profit from the inverse daily performance of Apple stock. It utilizes derivatives to achieve its objective, making it a high-risk, high-reward instrument. Due to the daily reset, it is unsuitable for long-term investment as its value erodes over time. Investors should thoroughly understand the risks associated with leveraged and inverse ETFs before investing in AAPD.

Data Sources:

• Direxion Funds Website
• SEC Filings
• Yahoo Finance

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Past performance is not indicative of future results. Investing in leveraged and inverse ETFs involves significant risks, including the potential loss of principal. Investors should consult with a qualified financial advisor before making any investment decisions.