Understanding the DEFIANCE DAILY TARGET 2X LONG SOFI ETF (SOFX)

What this ETF is trying to do

The DEFIANCE DAILY TARGET 2X LONG SOFI ETF (ticker: SOFX) is a leveraged ETF. This means it is designed to seek a specific daily goal related to SoFi. Because it is a leveraged fund, it uses financial tools to try to multiply the daily movements of its target.

What the numbers show

The data shows a significant decline in the share price over the last year.

• Price Return: The one-year price return was approximately -83.64%. This number measures only the change in the share price itself.

• Total Return: The one-year total return was approximately -81.63%. Total return is a different measurement that includes the impact of distributions.

• Year-to-Date (YTD): The YTD price return is approximately -72.72%.

• Price Comparison: The current price is $7.75. An estimated price from roughly one year ago was approximately $47.36.

Income and distribution explanation

SOFX has a very high distribution yield of approximately 46.43%. This figure describes the cash distributions relative to the ETF's price. However, it is important to remember that a high distribution yield does not mean an investor earned that percentage as a total return.

The distributions for this fund are described as "irregular" or "less frequent." In the last 12 months, there was one recorded payout. While these distributions provide cash, they do not guarantee that the value of your original investment will stay the same.

NAV erosion explanation

This ETF has a severe erosion-risk flag. This means that StockValueFinder's screening rules detected substantial price deterioration and a high erosion-risk score. Specifically, the fund has an erosion score of 10, which is labeled as "Severe price erosion."

It is important to distinguish between price and NAV. A falling market price (price erosion) is what we see in the data here. 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.

Pros

• High Distribution Yield: The fund offers a very high distribution yield of approximately 46.43%.

Cons

• Severe Price Decline: The fund has experienced a major share-price decline, with the one-year price return at approximately -83.64%.

• High Risk Warning: The fund carries a severe erosion-risk flag due to its price trends.

• Irregular Income: Distributions are not frequent or regular.

Beginner takeaway

When looking at SOFX, it is important to look at both the distribution yield and the price return. While the distribution yield is very high, the share price has declined significantly over the past year. High yields can sometimes be accompanied by a falling share price, which is why looking at the "total return" provides a more complete picture of how the fund has performed.