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.

What this ETF is trying to do

The Direxion Daily Financial Bear 3X Shares (FAZ) is a specialized fund. It is both "inverse" and "leveraged." This means it is designed to move in the opposite direction of financial stocks, and it uses leverage to try to triple those daily moves. It is built for traders who believe the financial sector will go down.

What the numbers show

Because this ETF has a history of share splits, we look at split-adjusted returns to see how it has performed.

• Year-to-Date (YTD): The price return is approximately 1.22%, while the total return is approximately 3.22%.

• One Year: The price return is -4.63%, and the total return is -2.33%.

• Three Year: The price return is -80.77%, and the total return is -78.42%.

Price return only measures the change in the share price. Total return is a different measure that includes distributions.

Income and Distribution Explanation

FAZ pays out cash to investors. It usually does this quarterly. The distribution yield is approximately 2.57%.

It is important for beginners to know that a high distribution yield alone can be misleading. While these payments provide cash income, they do not guarantee that the original money invested (the principal) is safe.

NAV Erosion Explanation

"NAV erosion" happens when the value of an ETF's underlying assets wears away over time. This is a common risk for leveraged and inverse funds.

FAZ has a history of reverse splits. In a reverse split, multiple old shares are combined into fewer new shares, which mechanically raises the share price. This increase does not restore lost investment value. FAZ has had 7 split events, with the most recent on September 29, 2025.

However, the current erosion-risk score is 94, which is labeled as "Stable / sideways" with "good" severity. The severe erosion-risk flag is currently false.

Top Holdings

As of October 8, 2026, the fund holds:

• Goldman Sachs FS Treasury Intms Instl (FTIXX): 29.49%

Pros

• Provides a way to bet against the financial sector.

• Uses leverage to amplify daily movements.

• Provides regular quarterly cash distributions.

Cons

• Significant long-term price decline (down over 80% over three years).

• History of reverse splits to manage the share price.

• High risk associated with leveraged and inverse strategies.

Beginner Takeaway

FAZ is a high-risk tool used for short-term trading, not a traditional long-term investment. While it pays a distribution yield, the long-term total returns have been deeply negative. Investors should be aware that reverse splits are used to keep the share price from falling too low, but they do not recover lost value.