Understanding AMZD: Direxion Daily AMZN Bear 1X Shares

AMZD is an inverse, single-stock ETF designed to move in the opposite direction of Amazon's stock price. This means the fund is built for investors who believe Amazon's share price will go down.

What the Numbers Show

The recent data shows a decline in the share price of AMZD. Over the last year, the price return was -20.23%. When looking further back, the three-year price return was -60.24%.

For the current year (YTD), the price return is -17.50%.

The fund also provides "total return" figures, which include the impact of distributions. The one-year total return was -18.27%, and the three-year total return was -55.83%. Because the total returns are slightly higher than the price returns, it shows that distributions provided a small cushion, though the overall value still declined.

Income and Distribution Explanation

AMZD pays distributions usually on a quarterly basis. Over the last 12 months, it has made 4 payments totaling 0.2389 per share. This results in a distribution yield of approximately 2.88%.

It is important for beginners to remember that a distribution yield is not the same as a total return. While the fund pays out cash, the share price has fallen significantly during the same period.

Price and NAV Erosion Explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Regarding price-based evidence, AMZD has an erosion score of 55, which is labeled as "Moderate price erosion." This means the fund's market price has shown a steady downward trend over time. However, the severe erosion-risk flag is currently false.

Pros

• Inverse Exposure: It allows investors to gain from a decline in Amazon's stock price without needing to short the stock themselves.

• Regular Income: The fund provides quarterly cash distributions.

Cons

• Significant Price Decline: The fund has seen a large drop in share price over the last three years.

• Low Income Grade: The fund has an income rating grade of "F" and an income rating score of 38.

Beginner Takeaway

AMZD is a specialized tool used to bet against a single company. While it pays a small distribution yield, the share price has declined sharply over the short and long term. This highlights a key lesson for new investors: a distribution yield can exist even while the main investment is losing value. Always look at the total return to see the full picture.