Understanding the Direxion Daily AVGO Bear 1X Shares ETF (AVS)

What this ETF is trying to do

The AVS ETF is an "inverse" fund. This means it is designed to move in the opposite direction of a specific underlying asset. While this fund is not a single-stock ETF, its goal is to provide the opposite performance of Broadcom Inc. (AVGO). When the target asset goes down, this ETF is designed to go up, and vice versa.

What the numbers show

The data shows that the share price of AVS has declined over the past year.

• Year-to-Date (YTD): The price return is approximately -13.81%. When looking at the total return (which includes distributions), the YTD figure is approximately -12.43%.

• One-Year Performance: The one-year price return is approximately -21.11%. The one-year total return is approximately -18.73%.

• Price Comparison: The current price is $8.15. An estimated price from roughly one year ago was approximately $10.32.

It is important to note that the price return only measures the change in the share price, while the total return includes the impact of distributions.

Income and distribution explanation

AVS provides cash distributions to shareholders. The distribution yield is approximately 3.30%. Over the last 12 months, there were 4 distributions, which usually happen on a quarterly basis. The most recent data shows these payments often occur on Tuesdays.

While the fund provides these distributions, a high yield does not guarantee that an investor will earn that percentage as a total return. In this case, the total returns for both the year-to-date and one-year periods are negative.

NAV erosion explanation

The fund has an erosion-risk score of 55, which is labeled as "moderate price erosion." This indicates that the market price of the shares has shown a downward trend.

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. "NAV erosion" refers to a decline in the actual net asset value of the fund, whereas "price erosion" refers to the decline in the price at which the ETF trades on the stock exchange.

Pros

• Inverse Strategy: It provides a way to potentially profit from the downward movement of its target asset.

• Regular Distributions: The fund has a history of making quarterly distributions.

Cons

• Price Decline: The ETF has experienced significant share-price declines over the last year.

• Negative Total Returns: Both the price return and total return have been negative for the year-to-date and one-year periods.

• Moderate Erosion Risk: The fund shows a moderate risk of price erosion.

Beginner takeaway

AVS is an inverse ETF, meaning it is built to move opposite to its target. Investors should be aware that this fund has seen a decline in share price over the last year. While it pays quarterly distributions, the total return (which includes those payments) has been negative. Always remember that a distribution yield is not the same as a total return.