DFEN: DIREXION DAILY AEROSPACE & DEFENSE BULL 3X SHARES
ETF Education Report: DIREXION DAILY AEROSPACE & DEFENSE BULL 3X SHARES (DFEN)
What this ETF is trying to do
The DFEN ETF is a leveraged fund. This means it is designed to move in the same direction as the aerospace and defense industry, but with three times the intensity. It is important to know that leveraged funds are different from standard ETFs and can behave very differently than the market they follow.
What the numbers show
The current price of DFEN is $52.15. To understand how the price has changed, we can look at different timeframes:
• Year-to-Date (YTD): The price return is approximately -18.36%. The total return is approximately -18.27%.
• One Year: The price return is approximately -21.12%. The total return is approximately -13.22%.
• Three Year: The price return is approximately 247.67%. The total return is approximately 337.62%.
Please note that price return only measures the change in the share price. Total return is a different measurement that includes the impact of distributions.
An estimated price from roughly one year ago was $66.11. Based on this, the share price has declined over the last 12 months.
Income and distribution explanation
DFEN has a distribution yield of approximately 10.88%. This represents the cash distributions paid out relative to the ETF price. Over the last 12 months, there were 5 payouts. These distributions usually happen on a quarterly basis.
It is important for new investors to remember that a high distribution yield does not mean you are earning that same amount as a total return. High yields can sometimes exist even when the share price is falling.
NAV erosion explanation
"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). While a falling market price is a "share-price decline," it does not always mean the NAV has declined.
For this ETF, the erosion-risk score is 55, which is labeled as "Moderate price erosion." This is a measurement of risk, not a guarantee that the fund's value has been destroyed.
Top Holdings
The following are the top holdings in this portfolio (note that this list is partial):
• DJSASD SWAP ASSET LEG: 67.15%
• DREYFUS GOVT CASH MAN INS: 6.18%
• GE AEROSPACE: 4.83%
• RTX CORP: 3.73%
• GOLDMAN FINL SQ TRSRY INST 506: 3.13%
• BOEING CO: 1.73%
• HOWMET AEROSPACE INC: 1.06%
• LOCKHEED MARTIN CORP: 1.06%
• TRANSDIGM GROUP INC: 1.05%
• GENERAL DYNAMICS CORP: 1.03%
Holdings can change over time.
Pros
• The fund has shown very high total returns over a three-year period.
• It offers a high distribution yield for those seeking cash income.
Cons
• The fund is leveraged, which increases risk.
• Recent one-year and year-to-date price returns have been negative.
• There is a moderate erosion-risk score.
Beginner takeaway
When looking at DFEN, it is important to distinguish between price return and total return. While the distribution yield is high, the share price has seen recent declines. Because this is a leveraged ETF, it carries different risks than a standard fund.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | DJSASD SWAP ASSET LEG | n/a | 67.15% |
| 2 | DREYFUS GOVT CASH MAN INS | n/a | 6.18% |
| 3 | GE AEROSPACE | GE | 4.83% |
| 4 | RTX CORP | RTX | 3.73% |
| 5 | GOLDMAN FINL SQ TRSRY INST 506 | n/a | 3.13% |
| 6 | BOEING CO | BA | 1.73% |
| 7 | HOWMET AEROSPACE INC | HWM | 1.06% |
| 8 | LOCKHEED MARTIN CORP | LMT | 1.06% |
| 9 | TRANSDIGM GROUP INC | TDG | 1.05% |
| 10 | GENERAL DYNAMICS CORP | GD | 1.03% |