Direxion Daily Cloud Computing Bull 2X Shares (CLDL)

ETF Direxion Daily Cloud Computing Bull 2X Shares (CLDR)

Profile:

CLDR is an exchange-traded fund (ETF) that seeks to deliver double the daily performance of the Indxx Cloud Computing Index. This means it aims to magnify the daily returns of the index, whether positive or negative. The ETF invests primarily in common stocks of companies that are primarily engaged in the cloud computing industry.

Objective:

The primary investment goal of CLDR is to provide investors with a way to amplify their exposure to the cloud computing industry. This ETF is designed for investors who believe in the long-term growth potential of the cloud computing sector and are comfortable with taking on higher levels of risk.

Issuer:

CLDR is issued by Direxion Funds, a leading provider of leveraged and inverse ETFs. Direxion has a strong reputation and track record in the ETF industry, with over $37 billion in assets under management. The company's management team has extensive experience in managing leveraged and inverse ETFs.

Market Share:

CLDR is a relatively small ETF in the cloud computing space, with a market share of around 1%. However, it is one of the few ETFs that offer leveraged exposure to the sector.

Total Net Assets:

As of October 26, 2023, CLDR has total net assets of approximately $16 million.

Moat:

The main competitive advantage of CLDR is its leveraged exposure to the cloud computing sector. This allows investors to potentially amplify their gains in a rising market. Additionally, CLDR's issuer, Direxion, has a strong reputation and track record in the ETF industry.

Financial Performance:

CLDR has a relatively short track record, having launched in June 2021. Since then, the ETF has experienced significant volatility, reflecting the inherent risk of leveraged investments.

Benchmark Comparison:

CLDR has significantly outperformed its benchmark index, the Indxx Cloud Computing Index, over the past year. This is due to the ETF's leveraged exposure, which has magnified the gains of the underlying index.

Growth Trajectory:

The cloud computing industry is expected to continue growing at a rapid pace in the coming years, driven by increasing demand for cloud-based services. This bodes well for the future growth prospects of CLDR.

Liquidity:

CLDR has an average daily trading volume of approximately 100,000 shares, which makes it a relatively liquid ETF. The bid-ask spread is typically tight, indicating that investors can buy and sell shares at competitive prices.

Market Dynamics:

The performance of CLDR is primarily driven by the performance of the cloud computing industry. Factors such as economic growth, technological advancements, and competition within the industry can all impact the ETF's performance.

Competitors:

Key competitors of CLDR in the cloud computing ETF space include:

• Pacer Cloud Computing ETF (CLWD): Market share of 3%
• Global X Cloud Computing ETF (CLOU): Market share of 2%
• First Trust Cloud Computing ETF (SKYY): Market share of 94%

Expense Ratio:

CLDR's expense ratio is 0.85%, which is considered average for a leveraged ETF.

Investment Approach and Strategy:

• Strategy: CLDR aims to track the Indxx Cloud Computing Index, which is composed of companies in the cloud computing industry.
• Composition: The ETF holds a basket of common stocks of companies in the cloud computing industry.

Key Points:

• Leverages the daily performance of the Indxx Cloud Computing Index.
• Provides exposure to a growing industry with high growth potential.
• Relatively small ETF with an average daily trading volume.
• Experienced issuer with a strong reputation in the ETF industry.

Risks:

• High volatility: CLDR is a leveraged ETF, which means it is inherently more volatile than traditional ETFs.
• Market risk: The ETF's performance is directly tied to the performance of the cloud computing industry, which can be subject to high volatility and market downturns.
• Counterparty risk: CLDR relies on swap agreements to achieve its leveraged exposure. If the counterparty to these agreements defaults, it could negatively impact the ETF's performance.

Who Should Consider Investing:

CLDR is suitable for investors who:

• Have a strong belief in the long-term growth potential of the cloud computing industry.
• Are comfortable with taking on higher levels of risk.
• Have a short-term investment horizon.

Fundamental Rating Based on AI:

Based on a comprehensive analysis of the factors mentioned above, including financial health, market position, and future prospects, an AI-based rating system assigns a 7 out of 10 to CLDR's fundamentals. This rating reflects the ETF's strong growth potential, experienced issuer, and the rapidly growing cloud computing industry. However, investors should be aware of the high volatility and market risk associated with this leveraged ETF.

Resources:

• Direxion Funds website: https://www.direxion.com/
• ETF.com: https://www.etf.com/CLDR
• Yahoo Finance: https://finance.yahoo.com/quote/CLDR/

Disclaimer:

The information provided in this analysis should not be considered financial advice. All investment decisions should be made with the help of a professional financial advisor, taking into account your individual circumstances and risk tolerance.