Direxion Daily TSM Bear 1X Shares (TSMZ)

Overview

The Direxion Daily TSM Bear 1X Shares (TSMD) seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the daily performance of the Russell 2000u00ae Index. It provides a way for investors to potentially profit from short-term declines in the Russell 2000 Index.

Reputation and Reliability

Direxion is a well-known issuer of leveraged and inverse ETFs, with a track record of providing these types of products to the market.

Management Expertise

Direxion's management team has experience in creating and managing leveraged and inverse ETFs.

Goal

To seek daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the daily performance of the Russell 2000u00ae Index.

Investment Approach and Strategy

Strategy: The ETF employs a strategy of using financial instruments such as swaps, futures contracts, and forward contracts to achieve its daily inverse target.

Composition The ETF's composition primarily consists of derivative instruments designed to replicate the inverse performance of the Russell 2000 Index.

Market Share: TSMD's market share within the inverse small-cap ETF segment is moderate but influenced by investor sentiment and market volatility.

Total Net Assets (AUM): 24720000

Key Competitors

• ProShares Short Russell2000 (RWM)
• ProShares UltraShort Russell2000 (TWM)

Competitive Landscape

The inverse small-cap ETF market is dominated by ProShares. TSMD offers a non-leveraged approach, potentially appealing to investors seeking less volatility than leveraged options like TWM but faces stiff competition from the more established RWM.

Historical Performance: The historical performance of TSMD is inversely correlated to the Russell 2000 Index. Due to the nature of inverse ETFs, past performance is not indicative of future returns, and daily resets can erode long-term value.

Benchmark Comparison: The ETF's performance should ideally match the inverse of the daily performance of the Russell 2000 Index, before fees and expenses. Tracking error can occur due to fund expenses and operational factors.

Expense Ratio: 0.53

Average Trading Volume

The average trading volume of TSMD is moderate, suggesting reasonable liquidity for typical trading sizes.

Bid-Ask Spread

The bid-ask spread varies depending on market conditions and trading volume; it should be monitored to minimize trading costs.

Market Environment Factors

Economic indicators, interest rate changes, and overall market sentiment towards small-cap stocks significantly influence TSMD's performance. Negative news or anticipated declines in the Russell 2000 typically benefit TSMD.

Growth Trajectory

TSMD's growth is tied to investor demand for hedging or speculating against potential downturns in the small-cap market. Its strategy and holdings remain consistent, focusing on the daily inverse of the Russell 2000.

Competitive Edge

TSMD provides a simple, non-leveraged inverse exposure to the Russell 2000 index, appealing to investors who prefer to avoid the complexities and higher volatility associated with leveraged ETFs. It can serve as a tactical tool for short-term bearish bets or hedging purposes. However, the daily reset feature inherent in inverse ETFs diminishes its suitability for long-term investment strategies. It faces competition from similar products, requiring investors to consider trading volume and expense ratios when making their choice.

Volatility

TSMD experiences volatility directly correlated to the volatility of the Russell 2000 Index. Inverse ETFs are generally considered higher risk due to the potential for rapid value erosion if the underlying index moves against the intended direction.

Market Risk

The primary market risk is that the Russell 2000 Index will increase in value, leading to losses in TSMD. Additionally, the daily reset feature can lead to performance drag over longer periods, especially in volatile or sideways markets.

Ideal Investor Profile

TSMD is suited for sophisticated investors who understand the risks and mechanics of inverse ETFs. These investors typically use it for short-term hedging or speculative purposes, rather than as a long-term investment.

Market Risk

TSMD is best suited for active traders with a short-term bearish outlook on the Russell 2000. It is not suitable for long-term investors or passive index followers.

Direxion Daily TSM Bear 1X Shares (TSMD) is designed to provide the inverse of the daily performance of the Russell 2000 Index, offering a tool for short-term bearish strategies or hedging. It is not intended for long-term holding due to daily resetting, which can erode value. Compared to competitors, it doesn't have high market share, and sophisticated investors need to consider the expense ratio and trading volume before investing. Itu2019s best used by active traders with a clear understanding of inverse ETF mechanics and market conditions.

Data Sources:

• DirexionShares.com
• ETF.com
• Bloomberg

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered financial advice. Investment decisions should be based on individual risk tolerance, financial situation, and thorough research.