Understanding Direxion Daily XOM Bear 1X Shares (XOMZ)

XOMZ is an inverse ETF designed to move in the opposite direction of a specific stock. This means if the underlying stock's price goes down, XOMZ is designed to go up, and vice versa.

What the Numbers Show

The recent data for XOMZ shows a significant decline in share price. The current price is $16.89. An estimated price from roughly one year ago was $23.26.

Looking at the returns:

• Year-to-Date (YTD): The price return is -23.02%, and the total return is -22.39%.

• One-Year: The price return is -27.40%, and the total return is -26.25%.

Price return measures only the change in the share price. Total return is a broader measure that includes distributions. In both the short and one-year views, the ETF has experienced a share-price decline.

Income and Distribution Explanation

XOMZ has a distribution yield of approximately 1.76%. Over the last 12 months, it has made two payments, totaling $0.30 per share. The distribution frequency is listed as irregular or less frequent.

It is important for new investors to remember that a distribution yield is not the same as a total return. While the ETF provides some cash income, the total return figures show that this income did not offset the decline in the share price.

Price and 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 data does show significant price erosion. XOMZ has an erosion score of 30 and a "significant" erosion severity label. Additionally, a severe erosion-risk flag is active. This flag was triggered because the split-adjusted price trend and/or the erosion score indicate substantial price deterioration.

Pros

• Inverse Strategy: It provides a way for investors to seek gains when the underlying stock price falls.

• Some Income: The fund has provided small cash distributions to shareholders.

Cons

• Price Decline: The ETF has seen a significant share-price decline over the last year.

• Low Income Grade: It has an income rating grade of "F" and a low income rating score of 29.

• High Risk: The severe erosion-risk flag indicates a worrying trend in the share price.

Beginner Takeaway

XOMZ is a specialized tool used to bet against a stock. It is not a traditional "buy and hold" investment for long-term growth. The recent data shows that the share price has fallen significantly, and the small distributions provided have not been enough to keep the total return positive. Investors should be aware of the severe erosion-risk flag when researching this ETF.