ETF Education Report: AAPU

What this ETF is trying to do

The Direxion Daily AAPL Bull 2X Shares (AAPU) is a specialized type of fund known as a single-stock ETF. This means it focuses on just one company: Apple Inc. (AAPL). It is also a "leveraged" ETF, which means it aims to provide more movement than the actual stock.

What the numbers show

The current price of AAPU is $45.07. To understand how the price has changed, we can look at different timeframes:

• Year-to-Date (YTD): The price return is approximately 34.22%.

• One Year: The price return was approximately 41.73%.

• Three Years: The price return was approximately 85.32%.

It is important to know that "price return" only tracks the change in the share price. This ETF also provides "total return" figures, which include the value of distributions (cash payments). For example, over the last year, the one-year total return was approximately 53.66%, which is higher than the price return alone.

If you had invested in a single share roughly one year ago, the estimated starting price would have been about $31.80.

Income and distribution explanation

AAPU pays out cash distributions to investors. The distribution yield is approximately 6.52%. This number describes the cash payments relative to the current ETF price. Over the last 12 months, there were 5 payouts. These payments usually happen on a quarterly basis, though they often land on a Tuesday.

Remember: A high distribution yield is not the same as total return. While distributions provide cash, they are separate from the movement of the share price.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. Some investors worry about this because they want to keep their original investment (the principal) stable. For AAPU, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• High Returns: The fund has shown significant price and total returns over the last one, and three-year periods.

• Income: It offers a distribution yield of approximately 6.52%.

Cons

• Single Stock Focus: The fund is heavily tied to one company. According to the top holdings, Apple Inc. (AAPL) makes up 9.26% of the weight in this specific data set, though it is a single-stock ETF.

• Leverage: Because this is a leveraged ETF, it is designed for different types of market movement than a standard stock.

Beginner takeaway

AAPU is a leveraged, single-stock ETF focused on Apple. It has shown strong price and total returns recently and provides regular cash distributions. However, because it is leveraged and focused on one company, its price can move very differently than a standard investment. Always remember to look at both the price return and the total return to see the full picture.