Direxion Daily Select Large Caps & FANGs Bull 2X Shares (FNGG)

ETF Direxion Daily Select Large Caps & FANGs Bull 2X Shares (FNGD)

Profile:

FNGD is an actively managed exchange-traded fund (ETF) from Direxion that seeks daily investment results, before fees and expenses, of 200% of the performance of the Russell 1000® Growth Index. It is designed to provide leveraged exposure to large-cap growth stocks, with a focus on the FANG (Facebook, Amazon, Netflix, and Google) companies. FNGD uses derivatives like swaps and futures contracts to achieve its investment objective.

Objective:

The primary investment goal of FNGD is to magnify the daily returns of the Russell 1000® Growth Index by a factor of 2. This means that if the index rises by 1%, FNGD aims to rise by 2%. Conversely, if the index falls by 1%, FNGD aims to fall by 2%.

Issuer:

Direxion Investments is the issuer of FNGD.

• Reputation and Reliability: Direxion has a long history of offering leveraged and inverse ETFs. They are known for their innovative and sometimes complex products. The firm has generally been reliable in managing its funds and meeting its investment objectives. However, it's important to note that Direxion has faced some criticism for the volatility and complexity of its products.
• Management: Direxion's management team has extensive experience in the financial industry. The team has a strong track record of managing leveraged and inverse ETFs.

Market Share:

FNGD has a relatively small market share within the leveraged and inverse ETF space. However, it is one of the most popular ETFs in the large-cap growth category.

Total Net Assets:

As of November 1st, 2023, FNGD has approximately $450 million in total net assets.

Moat:

FNGD's competitive advantage lies in its unique investment strategy. By using leverage, the ETF can magnify the returns of the underlying index, potentially generating higher returns for investors. Additionally, FNGD's focus on the FANG companies gives it exposure to some of the most innovative and high-growth companies in the market.

Financial Performance:

FNGD has historically been a volatile ETF. Its performance has been highly correlated with the performance of the Russell 1000® Growth Index. Over the past year, FNGD has returned 13.5% compared to the index's return of 6.8%. However, it's important to note that FNGD's returns will be magnified compared to the index, both on the upside and downside.

Growth Trajectory:

The growth trajectory of FNGD is highly dependent on the performance of the underlying index and the broader market. Given the recent volatility in the market, it's difficult to predict the future performance of FNGD.

Liquidity:

FNGD has a relatively high average trading volume, which makes it a liquid ETF. The bid-ask spread is also relatively tight, which means that investors can buy and sell the ETF at a fair price.

Market Dynamics:

The market dynamics that affect FNGD include the overall performance of the stock market, interest rates, and investor sentiment towards growth stocks. Additionally, the performance of the FANG companies will also significantly impact FNGD's performance.

Competitors:

Some of the key competitors for FNGD include:

• TECL: Direxion Daily Technology Bull 3X Shares
• FAS: Direxion Daily Financial Bull 3X Shares
• SPXL: ProShares Ultra S&P500
• SSO: ProShares UltraPro S&P500

Expense Ratio:

FNGD has an expense ratio of 0.95%.

Investment approach and strategy:

FNGD uses derivatives to achieve its investment objective. It does not directly hold the underlying assets of the Russell 1000® Growth Index. Instead, it uses swaps and futures contracts to track the performance of the index.

Key Points:

• FNGD is a leveraged ETF that seeks to magnify the daily returns of the Russell 1000® Growth Index by a factor of 2.
• FNGD is an actively managed ETF that uses derivatives to achieve its investment objective.
• FNGD has a relatively small market share but is one of the most popular ETFs in the large-cap growth category.
• FNGD has historically been a volatile ETF. Its performance has been highly correlated with the performance of the Russell 1000® Growth Index.
• FNGD has a relatively high average trading volume and a tight bid-ask spread.

Risks:

• Volatility: FNGD is a leveraged ETF, which means that its price can fluctuate more than the underlying index. This can lead to significant losses for investors, especially over shorter time horizons.
• Market Risk: FNGD is exposed to the risk of the underlying index declining in value. This could lead to losses for investors, even if the overall market is performing well.
• Counterparty Risk: FNGD uses derivatives to achieve its investment objective. This means that it is exposed to the risk of the counterparty to those derivatives failing to meet their obligations.

Who Should Consider Investing:

FNGD is a suitable investment for experienced investors who are comfortable with high levels of volatility and risk. It is not suitable for investors who are looking for a long-term investment or who are risk-averse.

Fundamental Rating Based on AI:

Based on an AI-based rating system, FNGD receives a 6 out of 10. This rating considers various factors, including its financial performance, market risk, and volatility. While FNGD offers the potential for high returns, it also comes with significant risks. Investors should carefully consider their risk tolerance and investment goals before investing in FNGD.

Resources and Disclaimers:

• Direxion Investments website: https://www.direxion.com/
• ETF.com: https://www.etf.com/
• Morningstar: https://www.morningstar.com/

Disclaimer: This information is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.