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 S&P Biotech Bear 3X Shares (LABD)

The Direxion Daily S&P Biotech Bear 3X Shares (LABD) is a leveraged and inverse ETF. It is designed to move in the opposite direction of the S&P Biotech index, aiming for three times the daily return of that index. This means if the biotech index goes down, this ETF is designed to go up, but it also means losses can be magnified.

What the Numbers Show

The recent performance of LABD shows a significant decline in share price. According to the supplied data:

• Year-to-Date (YTD): The price return is -61.63%, and the total return is -60.75%.

• One Year: The price return is -77.89%, and the total return is -77.12%.

• Three Year: The price return is -96.17%, and the total return is -95.73%.

The total return figures, which include distributions, are slightly higher than the price returns, but both show a steep downward trend.

Income and Distribution Explanation

LABD has a distribution yield of approximately 5.75%. Over the last 12 months, it has made 4 payments, usually on a quarterly basis.

It is important for new investors to remember that a distribution yield is not the same as a total return. While the ETF provides some cash income, the share price has fallen significantly during the same period. A high yield alone can be misleading if the value of the shares is dropping.

Price and NAV Erosion Explanation

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, the data shows a severe erosion-risk flag. This was triggered by a combination of a weak erosion score of 10 and a trend of substantial price deterioration.

Additionally, LABD has a history of reverse splits, with three events recorded. The most recent occurred on September 29, 2025, with a coefficient of 0.1. In a reverse split, multiple old shares are combined into fewer new shares, which mechanically raises the per-share price. This mechanical increase does not restore lost investment value.

Pros

• Provides a way for investors to bet against the biotech sector.

• Offers quarterly cash distributions.

Cons

• Extreme price decline over one, three, and five-year periods.

• High risk due to 3x leverage and inverse strategy.

• Severe price erosion risk and a history of reverse splits.

• An income rating grade of "F."

Beginner Takeaway

LABD is a high-risk tool used for short-term bets against biotech stocks. It is not a traditional "buy and hold" investment. The data shows that while it pays a distribution, the share price has fallen drastically over several years, and the fund has used reverse splits to manage its share price.