Understanding the Direxion Daily QCOM Bull 2X ETF (QCMU)

What this ETF is trying to do

The Direxion Daily QCOM Bull 2X ETF (QCMU) is a leveraged ETF. This means it is designed to seek a specific goal related to the performance of Qualcomm Inc. (QCOM). Because it is labeled as "2X," it uses leverage to try to amplify the daily movements of its target.

What the numbers show

The data shows that the share price for QCMU has declined over the past year.

• Price Return: This measures only the change in the share price. The one-year price return was approximately -22.22%. The year-to-date (YTD) price return was approximately -19.61%.

• Total Return: This includes both the share price change and any distributions paid out. The one-year total return was approximately -20.24%, and the YTD total return was approximately -18.16%.

To give you an idea of the price movement, the estimated price from roughly one year ago was $27.99, compared to the current price of $21.77.

Income and distribution explanation

QCMU provides some cash distributions to investors. The distribution yield is approximately 2.72%. Over the last 12 months, there were 4 distributions, which usually happen on a quarterly basis. The most recent distributions were paid on Tuesdays.

It is important to remember that a distribution yield tells you how much cash was paid out relative to the price, but it is not the same as your total return. In this case, even with distributions, the total returns for the year remained negative.

NAV erosion explanation

The ETF has an erosion-risk score of 55, which is labeled as "moderate price erosion." This means the market price of the shares has shown a downward trend.

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 we can see the share price has fallen, we cannot use this data to prove whether the Net Asset Value (NAV) itself has declined.

Pros

• The ETF provides a way to seek amplified exposure to Qualcomm Inc.

• It offers a quarterly distribution yield of approximately 2.72%.

Cons

• The ETF has experienced a significant share-price decline over the last year.

• It is a leveraged product, which can lead to faster price drops during market downturns.

• The income rating for this ETF is an "F" grade.

Beginner takeaway

QCMU is a leveraged ETF that focuses on Qualcomm Inc. While it pays out small quarterly distributions, the share price has dropped significantly over the past year. Investors should note that the total return (which includes distributions) is still negative, meaning the decline in share price was larger than the cash paid out.