Share-split context: A forward split was recorded on Apr 2, 2013 with coefficient 2. A forward split turns each old share into multiple new shares and lowers the quoted price per share proportionally. Proportional ownership is unchanged at the split moment, so the split itself creates neither a gain nor a loss. The price-return figures in this report are already split-adjusted.

ETF Education Report: TYD

What this ETF is trying to do

The Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD) is a leveraged ETF. This means it is designed to move in the same direction as 7-10 year Treasury bonds, but with three times the intensity. This ETF is listed on the NYSE.

What the numbers show

When looking at TYD, it is important to understand two different types of returns: price return and total return. Price return only tracks how the share price changes. Total return includes both the price change and any cash distributions paid out to investors.

Because this ETF has a history of forward splits, we use split-adjusted returns. In a forward split, each old share becomes multiple new shares, and the price per share drops proportionally. This does not change how much you own; it just changes how the shares are counted.

Here is what the data shows:

• Year-to-Date (YTD): The price return is approximately -21.64%, while the total return is approximately -19.63%.

• One-Year: The price return is approximately -22.82%, while the total return is approximately -20.07%.

• Three-Year: The price return is approximately -14.51%, while the total return is approximately -6.11%.

• Five-Year: The total return is approximately -57.02%.

Income and distribution explanation

TYD pays out cash distributions, which are usually paid quarterly. Over the last 12 months, it has made four payments. The distribution yield is approximately 4.12%.

It is important to remember that a high distribution yield does not mean you are making a profit. While these payments provide cash, they are separate from the share price movement.

NAV erosion explanation

"NAV erosion" refers to a decline in the value of the fund's underlying assets. StockValueFinder uses an erosion-risk score to measure this risk. TYD has an erosion score of 55, which is labeled as "Moderate price erosion." This indicates a moderate level of risk regarding price deterioration.

Pros

• The ETF provides a distribution yield of approximately 4.12%.

• It offers high exposure to the movement of 7-10 year Treasury bonds through leverage.

Cons

• The ETF has experienced significant negative price returns over the last year and three years.

• It carries a moderate erosion-risk score.

• Because it is a leveraged ETF, its price movements are much more intense than the underlying bonds.

Beginner takeaway

TYD is a complex, leveraged tool. When looking at its performance, always distinguish between the price return (the change in share price) and the total return (which includes distributions). While it pays out cash, the overall value of the investment has seen declines over several timeframes.

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*Disclaimer: This report is for educational purposes only. It does not provide financial advice. I am not recommending whether you should buy, sell, or hold this ETF.*