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

Overview

The Direxion Daily AAPL Bear 1X Shares (AAPL) is an ETF designed to provide daily inverse exposure to the performance of Apple Inc. (AAPL) stock. It seeks to profit from a decline in Apple's share price by delivering the inverse of Apple's daily return, before fees and expenses. It is part of the broader leveraged and inverse ETF landscape, focusing specifically on a single stock.

Reputation and Reliability

Direxion is a well-known issuer of leveraged and inverse ETFs. They have a track record of providing a range of specialized investment products, but are known for higher risk investment options.

Management Expertise

Direxion's management team has experience in creating and managing leveraged and inverse ETFs. Their expertise lies in understanding and implementing complex derivative strategies to achieve the desired daily investment objectives.

Goal

The primary investment goal of the Direxion Daily AAPL Bear 1X Shares is to provide investors with a daily return that corresponds to the inverse (-1x) of the daily performance of Apple Inc. stock.

Investment Approach and Strategy

Strategy: The ETF employs a derivatives-based strategy, primarily using swap agreements, futures contracts, and options, to achieve its daily inverse objective.

Composition The ETF's assets are primarily composed of derivative instruments, along with a small allocation to cash. It does not hold physical Apple shares. The holdings are rebalanced daily to maintain the target exposure.

Market Share: AAPL holds a niche market share within the single-stock inverse ETF category, but its share of the overall ETF market is small.

Total Net Assets (AUM): 19540000

Key Competitors

• GraniteShares 1x Short Apple Daily ETF (SAPP)

Competitive Landscape

The competitive landscape for single-stock ETFs is relatively limited. AAPL competes directly with other inverse Apple ETFs, and success hinges on accurately delivering the targeted daily inverse exposure. AAPL's advantage lies in its established presence and brand recognition. A disadvantage includes heightened daily rebalancing costs to meet investment objectives.

Historical Performance: Historical performance is highly dependent on the performance of Apple stock. Given it is an inverse fund, if Apple's stock rises, this ETF is likely to decline in value, and vice-versa. Due to the effects of compounding, long-term returns can significantly deviate from -1x Apple's aggregate return.

Benchmark Comparison: There is no direct benchmark index for a single-stock inverse ETF, but its performance is typically compared to the inverse daily returns of Apple Inc. stock.

Expense Ratio: 0.95

Average Trading Volume

The ETF's average trading volume can fluctuate but is generally moderate, impacting ease of entry and exit.

Bid-Ask Spread

The bid-ask spread can vary based on market conditions and trading volume, reflecting the cost of immediate execution.

Market Environment Factors

The ETF's performance is heavily influenced by news and events impacting Apple, general market sentiment, and technological innovations in the sector.

Growth Trajectory

The growth trajectory of the ETF is largely dependent on the volatility and directional trends of Apple stock, with limited growth potential beyond its defined inverse exposure.

Competitive Edge

AAPL's competitive edge primarily lies in its focused inverse exposure to a highly traded and closely followed stock (Apple). It provides a tool for investors seeking short-term hedging or speculative opportunities against Apple's performance. As one of the earliest entrants in this segment, it benefits from name recognition. However, its leveraged nature and short-term investment objective make it a high-risk product.

Volatility

The ETF is highly volatile due to its leveraged and inverse nature. The ETF is not suited for long term investment because compounding may impact the return significantly.

Market Risk

The primary market risk is tied to the performance of Apple stock. There are also risks associated with derivative strategies and the potential for tracking error.

Ideal Investor Profile

The ideal investor for the Direxion Daily AAPL Bear 1X Shares is an experienced trader with a high-risk tolerance, seeking short-term, tactical exposure to the inverse performance of Apple.

Market Risk

This ETF is not suitable for long-term investors or passive index followers. It is designed for active traders and should only be used for short-term hedging or speculative purposes.

The Direxion Daily AAPL Bear 1X Shares is a specialized ETF offering daily inverse exposure to Apple stock. It employs a derivatives-based strategy and is designed for short-term trading. Due to its leveraged nature and focus on a single stock, it is highly volatile and suitable only for experienced traders with a high-risk tolerance. It is not intended as a long-term investment, and its performance can deviate significantly from the long-term inverse of Apple's returns due to compounding effects.

Data Sources:

• Direxion
• SEC Filings
• Yahoo Finance

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investing in leveraged and inverse ETFs involves significant risks, including the potential for substantial losses. Past performance is not indicative of future results.