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

Overview

The Direxion Daily MSCI Emerging Markets Bull 3X Shares (EDC) seeks daily investment results, before fees and expenses, of 300% of the daily performance of the MSCI Emerging Markets Index. It is a leveraged ETF aiming for aggressive short-term gains, primarily focusing on emerging market equities.

Reputation and Reliability

Direxion is a well-known issuer of leveraged and inverse ETFs, generally considered reliable within the specialized leveraged ETF market. However, leveraged ETFs are complex and require careful understanding.

Management Expertise

Direxion has a dedicated team with expertise in managing leveraged and inverse funds. The team utilizes sophisticated hedging and trading strategies to achieve the fund's daily investment objective.

Goal

The primary investment goal of EDC is 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 strategy to achieve a 3x leveraged return on the daily performance of the MSCI Emerging Markets Index through the use of swaps, futures contracts, and other derivatives.

Composition EDC holds a combination of financial instruments, including swaps and futures contracts, designed to provide leveraged exposure to the MSCI Emerging Markets Index. The ETF's holdings are rebalanced daily to maintain its 3x leverage factor.

Market Share: EDC's market share within the leveraged emerging markets ETF space is relatively significant but highly volatile due to the fund's leveraged nature and focus on short-term trading.

Total Net Assets (AUM): 252000000

Key Competitors

• ProShares Ultra MSCI Emerging Markets (EET)

Competitive Landscape

The leveraged emerging markets ETF landscape is relatively limited. EDC aims to provide a higher degree of leverage (3x) compared to other competitors, like EET (2x). EDC is higher risk than unleveraged EM ETFs and even other leveraged EM ETFs due to its higher leverage factor.

Historical Performance: EDC's historical performance is characterized by high volatility and potential for both significant gains and losses, reflecting its leveraged nature. Long-term performance can deviate substantially from 3x the index's returns due to compounding effects.

Benchmark Comparison: Due to the daily leverage reset, EDC's long-term performance can deviate significantly from 3x the MSCI Emerging Markets Index's performance. Daily performance should closely track 3x the benchmark index.

Expense Ratio: 0.95

Average Trading Volume

EDC's average trading volume is moderate, indicating sufficient liquidity for many traders but potential for price fluctuations during periods of high volatility.

Bid-Ask Spread

EDC's bid-ask spread is typically moderate, but can widen during periods of high volatility or low trading volume, increasing the cost of trading.

Market Environment Factors

EDC is highly sensitive to economic indicators in emerging markets, global trade policies, currency fluctuations, and geopolitical events. Changes in investor sentiment towards emerging markets significantly impact the fund's performance.

Growth Trajectory

EDC's growth trajectory is dependent on continued investor interest in leveraged emerging market exposure and positive performance of the underlying MSCI Emerging Markets Index. Changes to the fund's leverage factor or tracking methodology could also impact its growth.

Competitive Edge

EDC's main advantage is its higher leverage factor (3x), appealing to investors seeking amplified daily returns on emerging market equities. However, the fund's high leverage leads to higher risk. The daily reset mechanism helps to target intraday profit but does not suit long-term investment. The fund remains an option for day traders who want to profit from the performance of emerging market equities.

Volatility

EDC exhibits extremely high volatility due to its leveraged nature, making it unsuitable for risk-averse investors.

Market Risk

EDC is subject to significant market risk due to its exposure to emerging market equities and amplified by the leverage factor. Emerging markets are inherently more volatile than developed markets.

Ideal Investor Profile

EDC is designed for sophisticated, short-term traders with a high-risk tolerance who understand the complexities of leveraged ETFs and actively monitor their positions.

Market Risk

EDC is suitable for active traders seeking short-term, leveraged exposure to emerging markets. It is not suitable for long-term investors or those seeking passive index-tracking strategies.

Direxion Daily MSCI Emerging Markets Bull 3X Shares (EDC) is a leveraged ETF designed for sophisticated, short-term traders seeking amplified daily returns on emerging market equities. It carries extremely high volatility and is unsuitable for long-term investors. EDC's performance is directly tied to the daily performance of the MSCI Emerging Markets Index, magnified by a 3x leverage factor. The fund's high-risk profile and potential for significant losses require careful consideration and active monitoring.

• EET
• YINN
• FAS
• LABU

Data Sources:

• Direxion
• MSCI
• Yahoo Finance
• ETF.com

Disclaimers:

The information provided is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Leveraged ETFs are complex instruments and are not suitable for all investors. Past performance is not indicative of future results.