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

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

Profile:

Direxion Daily AAPL Bear 1X Shares is an exchange-traded fund (ETF) that seeks to deliver the inverse (-1x) daily performance of the Apple Inc. (AAPL) stock price. It primarily focuses on the technology sector with a specific emphasis on the performance of Apple. The ETF's investment strategy involves holding short positions in AAPL stock and using financial derivatives to amplify the daily return.

Objective:

The primary objective of BEAR is to provide investors with a tool to potentially profit from a decline in AAPL's stock price. It aims to deliver returns that are inversely correlated to the daily performance of AAPL, aiming for a -1x return for every 1% drop in AAPL's price.

Issuer:

Direxion Shares ETF Trust is the issuer of BEAR. Direxion is a leading provider of leveraged and inverse ETFs, with a focus on delivering innovative and efficient investment solutions.

Reputation and Reliability:

Direxion has a solid reputation in the ETF industry, known for its expertise in creating and managing thematic and niche ETFs. The firm has a track record of over 20 years, with over $26 billion in assets under management.

Management:

The ETF is managed by a team of experienced portfolio managers at Direxion, with expertise in quantitative analysis and sector-specific knowledge. The team continuously monitors the market and adjusts the portfolio to achieve the desired investment objectives.

Market Share:

BEAR has a relatively small market share within the technology sector, representing a niche segment of inverse and leveraged ETFs focusing solely on AAPL.

Total Net Assets:

As of October 27, 2023, BEAR has approximately $44.5 million in total net assets.

Moat:

The ETF's competitive advantage lies in its unique exposure to the Apple stock price. It offers a targeted solution for investors seeking to capitalize on potential declines in AAPL's share price. Additionally, Direxion's expertise in managing leveraged and inverse ETFs contributes to the ETF's efficiency and effectiveness.

Financial Performance:

BEAR's performance is directly linked to the inverse daily performance of AAPL. Its historical performance reflects the fluctuations in AAPL's stock price. Analyzing the ETF's performance over various timeframes is crucial to understand its potential returns and risks.

Benchmark Comparison:

Comparing BEAR's performance to an index like the S&P 500 or a technology-focused index like the Nasdaq 100 can provide insights into the ETF's effectiveness in achieving its -1x daily target.

Growth Trajectory:

The ETF's growth trajectory is dependent on the future performance of Apple's stock price and the demand for inverse exposure to AAPL. Analysing trends and growth patterns in the technology sector and specifically in Apple's business can provide insights into the potential future performance of BEAR.

Liquidity:

Average Trading Volume: BEAR has an average daily trading volume of approximately 200,000 shares, indicating moderate liquidity for the ETF.

Bid-Ask Spread: The bid-ask spread for BEAR is typically around 0.05%, indicating relatively low trading costs.

Market Dynamics:

Factors affecting BEAR's market environment include the overall performance of the technology sector, economic indicators influencing investor sentiment, and Apple's specific business performance and future prospects.

Competitors:

Some key competitors of BEAR in the leveraged and inverse ETF space include:

• ProShares Short Apple (AAPL) (AAPD)
• Direxion Daily Technology Bear 3X Shares (TECS)
• Tuttle Capital Short Innovation ETF (SARK)

Expense Ratio:

BEAR has an expense ratio of 0.95%, which covers management fees and other operational costs.

Investment Approach and Strategy:

Strategy: The ETF aims to track the inverse (-1x) daily performance of the Apple Inc. (AAPL) stock price. It achieves this objective by holding short positions in AAPL stock and utilizing financial derivatives to amplify the daily return.

Composition: The ETF primarily holds short positions in AAPL stock and uses financial instruments like swaps to achieve its -1x daily target.

Key Points:

• Inverse exposure to the daily performance of AAPL stock.
• Seeks a -1x return for every 1% decline in AAPL's price.
• Moderate liquidity with an average trading volume of around 200,000 shares.
• Relatively low expense ratio of 0.95%.
• Focuses on the technology sector with a specific emphasis on Apple.

Risks:

• High volatility: Due to its inverse exposure, BEAR's price can be highly volatile, potentially amplifying losses if the underlying asset price moves against the expected direction.
• Market risk: The ETF's performance is directly tied to the performance of Apple's stock price, making it susceptible to market fluctuations and specific risks associated with Apple's business.

Who Should Consider Investing:

BEAR is suitable for investors with a short-term bearish outlook on Apple's stock price who are comfortable with high volatility and risk. It can be used as a hedging tool or to capitalize on potential short-term declines in AAPL's price. However, due to its inherent risks, it is not appropriate for all investors and should be considered a high-risk investment.

Fundamental Rating Based on AI: 6.5/10

BEAR receives a 6.5/10 rating based on an AI analysis of its fundamentals. The rating considers factors like the ETF's market positioning, historical performance, competition, fees, and future growth potential. While the ETF offers a unique exposure to Apple's stock price, its high volatility and market risk make it a relatively risky investment. The moderate liquidity and expense ratio are positive factors, but the limited market share and dependence on Apple's performance warrant caution.

Resources and Disclaimers:

Resources:

• Direxion website: https://www.direxion.com/
• BEAR ETF fact sheet: https://www.direxion.com/products/bear

Disclaimer:

This information is for educational purposes only and should not be considered financial advice. Investing involves risk, and you could lose money. Please consult with a financial professional before making any investment decisions.