Direxion Daily MSCI Emerging Markets Bull 3X Shares (EDC)

Overview

The Direxion Daily MSCI Emerging Markets Bull 3X Shares (ticker: EDC) seeks daily investment results, before fees and expenses, of 300% of the daily performance of the MSCI Emerging Markets Index. It provides leveraged exposure to emerging markets equities. The fund invests in financial instruments that Direxion believes, in combination, should produce daily returns consistent with the fund's investment objective.

Reputation and Reliability

Direxion is a well-known issuer of leveraged and inverse ETFs. They are generally considered reliable in delivering the stated daily leveraged exposure, but investors should understand the risks associated with leveraged products.

Management Expertise

Direxion's management team has experience in creating and managing leveraged and inverse ETFs, requiring specialized knowledge of derivatives and market dynamics.

Goal

To seek daily investment results, before fees and expenses, of 300% of the daily performance of the MSCI Emerging Markets Index.

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy aiming for 3x the daily return of the MSCI Emerging Markets Index, primarily through derivatives such as swaps and futures.

Composition The ETF primarily holds derivatives linked to the MSCI Emerging Markets Index, with a small portion in cash or money market instruments.

Market Share: EDC's market share is variable and depends on investor interest in leveraged emerging markets exposure. It represents a portion of the total leveraged ETF market.

Total Net Assets (AUM): 89410000

Key Competitors

• YINN
• FAS
• LABU

Competitive Landscape

The competitive landscape includes other leveraged ETFs focused on different sectors or regions. EDC faces competition from other emerging market ETFs, but it offers a unique 3x leveraged exposure. Advantages include the potential for magnified gains, while disadvantages include magnified losses and the effects of daily compounding (beta slippage).

Historical Performance: Historical performance is highly volatile due to the leveraged nature of the fund. Long-term returns can deviate significantly from 3x the underlying index due to daily compounding.

Benchmark Comparison: The ETF aims to provide 3x the *daily* return of the MSCI Emerging Markets Index, not the long-term return. Comparison should focus on daily tracking rather than long-term performance.

Expense Ratio: 0.94

Average Trading Volume

EDC exhibits moderate liquidity, with an average trading volume that can vary based on market conditions.

Bid-Ask Spread

The bid-ask spread can fluctuate depending on market volatility and trading volume, impacting the cost of trading.

Market Environment Factors

Economic growth in emerging markets, global trade policies, interest rate changes, and geopolitical events all impact EDC's performance.

Growth Trajectory

EDC's growth trajectory is dependent on investor demand for leveraged emerging market exposure, which is influenced by market sentiment and risk appetite; strategy and holdings remain fairly consistent.

Competitive Edge

EDC's competitive edge lies in providing a readily accessible, leveraged exposure to the MSCI Emerging Markets Index. This caters to sophisticated traders seeking to amplify short-term gains. It allows investors to express bullish views on emerging markets with higher potential returns (and risks) than unleveraged ETFs. The daily reset feature also makes it a tool for short-term trading strategies, rather than long-term buy and hold.

Volatility

EDC exhibits very high volatility due to its 3x leverage. It is significantly more volatile than unleveraged emerging market ETFs.

Market Risk

EDC is exposed to market risk associated with emerging markets equities, including currency fluctuations, political instability, and economic downturns; additionally, it faces the risk of amplified losses due to its leveraged structure.

Ideal Investor Profile

EDC is suitable for sophisticated traders and investors with a high risk tolerance who understand the complexities of leveraged ETFs and seek short-term, tactical exposure to emerging markets.

Market Risk

EDC is best suited for active traders with a short-term investment horizon. It is not appropriate for long-term investors or those seeking passive index tracking.

Direxion Daily MSCI Emerging Markets Bull 3X Shares (EDC) is a leveraged ETF designed to deliver three times the daily performance of the MSCI Emerging Markets Index. It is a high-risk, high-reward instrument suitable only for sophisticated traders with a short-term focus. The ETF's leveraged structure amplifies both gains and losses, making it highly volatile. Due to the effects of daily compounding, long-term returns can deviate significantly from the stated 3x leverage.

Data Sources:

• Direxion Investments website
• MSCI Index Fact Sheet
• Various financial news websites

Disclaimers:

The data provided is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Leveraged ETFs are not suitable for all investors.