Share-split context: A reverse split was recorded on Nov 4, 2024 with coefficient 0.1. 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.

Understanding the Direxion Daily Dow Jones Internet Bear 3X Shares (WEBS)

What this ETF is trying to do

The WEBS ETF is a specialized financial tool known as an "inverse" and "leveraged" ETF. This means it is designed to move in the opposite direction of the Dow Jones Internet index. Because it is "3X leveraged," it aims to provide three times the opposite performance of that index on a daily basis.

What the numbers show

The data shows significant declines in share price over various timeframes. The year-to-date (YTD) price return is approximately -34.09%. Looking further back, the one-year price return was about -28.45%, and the three-year price return was approximately -90.45%.

It is important to distinguish between price return and total return:

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price changes and any distributions paid out.

For WEBS, the total returns are slightly higher than the price returns (for example, the one-year total return was -26.14% compared to a -28.45% price return), but they still show large negative values over the one-year, three-year, and five-year periods.

This ETF also has a history of reverse splits. In a reverse split, multiple old shares are combined into fewer new shares, which causes the quoted per-share price to rise mechanically. This mechanical increase does not restore lost investment value.

Income and distribution explanation

WEBS has a distribution yield of approximately 4.41%. The trailing distributions were 0.5864, and the fund usually pays out on a quarterly basis. In the last 12 months, there were 4 payouts. While some investors look for yield, a high distribution yield does not guarantee that an investor has earned that percentage as a total return.

NAV erosion explanation

This ETF has a severe erosion-risk flag. The data shows an erosion score of 30, which is labeled as "Significant price erosion" with a severity level of "significant." This indicates that the share price has experienced substantial deterioration.

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

• The ETF provides a way to bet against the performance of the Dow Jones Internet index using leverage.

• It provides regular quarterly distributions.

Cons

• The ETF has experienced very large share-price declines over the one, three, and five-year periods.

• It carries a severe erosion-risk flag due to significant price deterioration.

• Because it is leveraged and inverse, it is a highly complex product.

Beginner takeaway

WEBS is a high-risk, leveraged inverse ETF. The data shows that the share price has declined significantly over long periods. While it pays a distribution yield, the total returns have been deeply negative. Investors should be aware that high yields can exist even when the share price is falling significantly.