ETF Education Report: TSXU

What this ETF is trying to do

The Direxion Daily Semiconductors Top 5 Bull 2X ETF (TSXU) is a specialized fund. It is a "leveraged" ETF, which means it uses financial tools to try to multiply the daily performance of certain semiconductor companies. This specific fund focuses on the top five companies in the semiconductor industry.

What the numbers show

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

• Price Return: This measures only how much the share price changed. The one-year price return was approximately 120.16%. The year-to-date (YTD) price return was approximately 125.73%.

• Total Return: This includes both the price changes and any cash distributions paid out. The one-year total return was approximately 127.03%. The YTD total return was approximately 127.44%.

To visualize the price change, if you had bought one share roughly one year ago at its estimated price of $29.57, that single share would be worth $65.10 today.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. This ETF has a distribution yield of approximately 1.68%. Over the last 12 months, it made five distributions. While these payments provide cash, they are separate from the total return of the fund. It is important to remember that a distribution yield tells you how much cash was paid out, but it does not guarantee the fund's value will stay the same.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases significantly. StockValueFinder uses an "erosion-risk score" to help monitor this. For TSXU, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The fund's holdings can change over time. As of the latest update, the top holdings include:

• SEMIEW SWAP ASSET LEG (58.84%)

• RECV SEMIEW ASSET SWAP (7.76%)

• DREYFUS GOVT CASH MAN INS (7.58%)

• DREYFUS TRSRY SECURITIES CASH MGMT (7.43%)

• GOLDMAN FINL SQ TRSRY INST 506 (5.25%)

• MICRON TECHNOLOGY INC (4.45%)

• TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD ADR (4.30%)

• NVIDIA CORP (4.24%)

• BROADCOM INC (4.00%)

• SK HYNIX INC ADR (4.00%)

Pros

• The fund has shown very high price returns over the last year.

• The total return is higher than the price return, meaning distributions added value to the overall performance.

Cons

• This is a leveraged ETF, which means it can be much more volatile (move up and down quickly) than standard funds.

• The income rating is a "C" grade, suggesting it is not primarily designed as a high-income tool.

Beginner takeaway

TSXU is a leveraged fund focused on semiconductor companies. While it has seen large price increases recently, leveraged funds carry different risks than traditional investments because they aim to multiply daily movements. Always distinguish between "price return" (the share price) and "total return" (price plus cash paid out).