TZA Profile
The Direxion Daily Small Cap Bear 3X Shares is an actively managed exchange-traded fund (ETF) designed to provide investors with three times the inverse performance of an index composed of small-capitalization stocks. The fund seeks to deliver leveraged inverse returns, meaning it aims to produce a return that is three times the opposite of the index's daily performance. This objective is achieved through the use of various financial instruments, including swap agreements, futures contracts, and short positions. The funds strategy is focused on capitalizing on declines in the value of small-cap stocks within the Russell 3000 Index.
The index tracked by the fund is a broad benchmark that represents approximately 2,000 small-cap companies, as part of the Russell 3000 Index, which is a comprehensive measure of the performance of small-cap equities. The index is designed to reflect the performance of small-cap stocks, which are typically characterized by lower market capitalization compared to larger companies. By targeting this segment of the market, the fund aims to provide inverse exposure specifically to smaller, potentially more volatile stocks.
Under normal market conditions, the fund maintains at least 80% of its net assets in financial instruments that provide inverse exposure to the index. This includes leveraging short positions and derivatives such as swap agreements and futures contracts. Additionally, the fund may use borrowed funds for investment purposes to achieve the desired leverage. This leveraged inverse strategy is intended to provide significant returns during periods of market decline but involves high risk, including the potential for substantial losses if the market moves contrary to the fund's position.
As a non-diversified fund, the Direxion Daily Small Cap Bear 3X Shares is concentrated in a specific sector of the market, focusing exclusively on small-cap stocks within the Russell 3000 Index. This concentrated approach allows the fund to target precise market movements but also increases exposure to the risks associated with small-cap equities. The actively managed strategy is designed to adapt to market conditions and optimize inverse leverage, aiming to capitalize on declines in the small-cap segment of the equity market.
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