What this ETF is trying to do

The Direxion Daily CSCO Bull 2X ETF (CSCL) is a leveraged ETF. This means it is designed to seek much higher returns than the performance of its underlying asset. It is not a standard fund that simply tracks a stock; instead, it uses financial tools to try to provide twice the daily performance of Cisco Systems Inc (CSCO). Because it is leveraged, its price can move much faster than the actual stock.

What the numbers show

The data shows significant growth in share price over the last year. The current price is $54.38. To understand how much the price has changed, we can look at an estimated price from roughly one year ago, which was $24.36.

Here is the breakdown of the returns:

• Year-to-Date (YTD) Price Return: The share price has increased by approximately 81.60% since the start of the year.

• One-Year Price Return: The share price has increased by approximately 123.26% over the last year.

It is important to distinguish between price return and total return. Price return only tracks the change in the share price. Total return includes both the price change and any cash distributions paid out to investors.

• YTD Total Return: Approximately 83.93%.

• One-Year Total Return: Approximately 127.50%.

Income and distribution explanation

CSCL provides some cash income through distributions. The distribution yield is approximately 1.39%. This number describes the cash paid out relative to the current ETF price. The fund usually pays these distributions on a quarterly basis, with 4 payments recorded over the last 12 months.

While some investors look for high yields, it is important to remember that a distribution yield is not the same as total return. Total return provides a more complete picture of how much value an investor gained, including both price growth and cash payments.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's internal assets). 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.

However, we can look at the erosion-risk score. For CSCL, the erosion score is 100, which is labeled as "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• High Price Growth: The fund has shown very high price returns over the last year.

• Positive Total Return: The total return is higher than the price return, meaning distributions added to the overall value.

• Low Price Erosion Risk: The current erosion-risk measurements are positive.

Cons

• Leverage Risk: As a leveraged ETF, it is designed for specific daily goals and can be much more volatile than a regular stock.

• Limited Holdings: The fund's exposure is highly concentrated, with Cisco Systems Inc (CSCO) listed as the top holding at 3.55%.

Beginner takeaway

CSCL is a high-powered, leveraged ETF focused on Cisco Systems. It has experienced very large price increases recently. While it pays a small amount of cash income, the main driver of its recent performance has been the significant increase in its share price. Because it is leveraged, it carries different risks than a standard, non-leveraged fund.