Share-split context: A reverse split was recorded on Sep 29, 2025 with coefficient 0.1. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

Understanding the Direxion Daily MSCI Emerging Markets Bear 3X Shares (EDZ)

What this ETF is trying to do

The EDZ ETF is a specialized tool known as an "inverse" and "leveraged" ETF. This means it is designed to move in the opposite direction of the MSCI Emerging Markets index. Because it is "3X leveraged," it aims to provide three times the inverse performance of that index. This type of fund is very different from a standard ETF that simply tracks the growth of companies.

What the numbers show

The data shows significant declines in value over different time periods. It is important to distinguish between "price return" (the change in the share price) and "total return" (which includes distributions).

• Year-to-Date (YTD): The price return is approximately -60.44%, while the total return is approximately -58.97%.

• One Year: The price return is approximately -63.64%, while the total return is approximately -62.09%.

• Three Years: The price return is approximately -89.85%, while the total return is approximately -88.41%.

This ETF has a history of reverse splits. In a reverse split, multiple old shares are combined into fewer new shares. This causes the price per share to rise mechanically, but it does not restore any lost investment value. Because this ETF has a split history, we use the supplied split-adjusted returns to understand its performance.

Income and distribution explanation

EDZ has a distribution yield of approximately 6.06%. This means the fund paid out cash distributions relative to its price. Over the last 12 months, there were four payouts, usually occurring on Tuesdays. However, a high distribution yield does not mean an investor earned that amount as a total return. In this case, the total returns have been negative despite the cash being paid out.

NAV erosion explanation

This ETF has a severe erosion-risk flag. This warning was triggered because the split-adjusted price trend and the erosion score indicate significant price deterioration. The fund has an erosion score of 10, which is labeled as "Severe price erosion."

"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," the high erosion score and severe risk flag suggest the fund's value has been dropping significantly over time.

Pros

• The fund provides a distribution yield of approximately 6.06%.

Cons

• The fund has experienced very large share-price declines over the last year and three years.

• It carries a severe erosion-risk flag.

• The total returns over the last three years are approximately -88.41%.

Beginner takeaway

EDZ is a highly complex, leveraged inverse ETF. While it pays a distribution yield, the share price has declined significantly. Investors should be aware that high yields can exist even when the value of the investment is falling, and the severe erosion-risk flag indicates a history of significant price deterioration.