What this ETF is trying to do

NFXL, the DIREXION DAILY NFLX BULL 2X SHARES, is a leveraged ETF. This means it is designed to aim for twice the daily performance of Netflix (NFLX). Because it uses leverage, its price can move much faster than the actual stock it follows.

What the numbers show

The current price of NFXL is $14.73. An estimated price from roughly one year ago was $56.57. This shows a significant share-price decline.

Looking at the specific returns:

• One-year price return: -73.96% (This measures only the change in the share price).

• One-year total return: -72.09% (This reflects the overall return, including distributions).

• Year-to-date (YTD) price return: -51.94%.

• Year-to-date (YTD) total return: -50.96%.

The difference between the price return and the total return shows how much the cash distributions helped offset some of the share-price decline.

Income and distribution explanation

NFXL has a distribution yield of approximately 13.06%. Over the last year, it made five distributions, and they usually happen on a quarterly basis. The trailing distributions were $1.92 per share.

It is important to remember that a high distribution yield does not mean an investor earned that percentage as a total return. While these payments provide cash income, they do not guarantee that the value of your original investment will stay the same.

NAV erosion explanation

NFXL has a severe erosion-risk flag. This means that StockValueFinder's rules detected significant price deterioration and a high erosion-risk score of 10, which is labeled as "Severe price erosion."

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. While the share price has dropped significantly, a falling market price by itself does not prove that the Net Asset Value (NAV) declined. However, the high erosion-risk score and the split-adjusted price trend triggered this severe warning.

Top Holdings

The ETF's exposure is focused on a single company:

• NETFLIX INC (NFLX): 5.95%

Please note that holdings can change over time.

Pros

• Provides high distribution yields.

• Offers leveraged exposure to Netflix.

Cons

• Significant share-price decline over the last year.

• Severe erosion-risk flag due to price trends.

• High risk associated with being a leveraged ETF.

Beginner takeaway

When looking at NFXL, it is important to look at more than just the high distribution yield. Because this is a leveraged ETF, the share price can drop very quickly. Always compare the "price return" (the change in share price) with the "total return" (which includes cash payments) to see the full picture of how the investment has performed.