Share-split context: A reverse split was recorded on May 23, 2025 with coefficient 0.05. 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

SMST, the DEFIANCE DAILY TARGET 2X SHORT MSTR ETF, is a specialized investment tool. It is a single-stock ETF that is both "inverse" and "leveraged." This means it is designed to move in the opposite direction of its target stock, and it aims for twice (2x) that movement every day. This ETF is also categorized as being crypto-related.

What the numbers show

As of October 7, 2026, the current price of SMST is $13.03. The performance data shows a significant share-price decline. The year-to-date (YTD) price return is approximately -85.96%. Over the last year, the one-year price return was approximately -52.08%. Because there are no distributions, the YTD total return and one-year total return match the price returns.

It is important to note that this ETF has a history of reverse splits. In a reverse split, multiple old shares are combined into fewer new shares. This causes the per-share price to rise mechanically. However, this mechanical increase does not restore lost investment value.

Income and distribution explanation

This ETF does not provide cash income to investors. There have been no distributions detected, and the distribution yield is 0%. Because there is no income being paid out, the income rating for SMST is an "F."

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 ETF has a severe erosion-risk flag. This warning was triggered by the split-adjusted price trend and an erosion score of 10, which is labeled as "severe price erosion."

Top Holdings

The holdings in an ETF can change over time. As of the most recent update, the fund's top holding is FIRST AMERICAN GOVERNMENT OBLIGS X, which makes up 7.48% of the portfolio.

Pros

• SMST provides a specific way for investors to seek exposure to the inverse movement of a single stock using leverage.

Cons

• The ETF has experienced very large share-price declines.

• It carries a severe erosion-risk flag due to its price trend.

• There is no distribution yield or regular income provided.

Beginner takeaway

SMST is a high-risk, leveraged, and inverse ETF. It is designed for specific daily trading goals rather than for earning regular income or long-term price growth. Because it is an inverse leveraged fund, it can experience very rapid and significant declines in value.