Direxion Daily Small Cap Bear 3X Shares ETF: $TZA

Welcome to this educational video on the Direxion Daily Small Cap Bear 3X Shares ETF, ticker symbol TZA.

First, let's define what an ETF is. An ETF, or exchange-traded fund, is a type of investment vehicle that tracks a particular index or basket of securities. ETFs can be bought and sold like stocks on a stock exchange.

Now, let's delve into TZA specifically. TZA is an ETF that aims to provide three times the inverse daily performance of the Russell 2000 Index, which is a small-cap index comprised of 2000 small-cap publicly traded companies. This means that TZA is designed to go up in value when the Russell 2000 Index goes down, and vice versa.

So, why might someone want to invest in TZA? Well, TZA is a bearish ETF, meaning that it is meant for investors who believe that the small-cap market is going to decline. These investors might want to use TZA as a hedge against their other investments, or as a way to profit from a potential market downturn.

However, it's important to note that TZA is a highly leveraged ETF, meaning that it uses financial instruments such as derivatives to amplify its returns. This can lead to greater potential gains or losses compared to non-leveraged ETFs. It's also important to note that leveraged ETFs are not suitable for long-term investment and are intended for short-term traders.

Now, let's talk about the fees associated with TZA. Like all ETFs, TZA charges an annual expense ratio to cover the cost of managing the fund.
The expense ratio for TZA is 0.93%, which is on the higher end compared to other ETFs. It's important to consider this fee when evaluating the potential returns of TZA.

In addition to the expense ratio, TZA also charges a daily rebalancing fee which is designed to cover the cost of maintaining the leverage of the fund. This fee can vary and is disclosed in the prospectus of the fund.

Now, let's talk about the risks associated with TZA. As mentioned earlier, TZA is a highly leveraged ETF and therefore carries a higher level of risk compared to non-leveraged ETFs. The leverage of TZA can lead to greater potential gains or losses, which means that the fund can be more volatile than non-leveraged ETFs.

In addition, TZA is exposed to the risk of the small-cap market as a whole. If the small-cap market performs poorly, TZA is likely to also perform poorly. It's important to carefully evaluate the potential risks and returns of TZA before making an investment.

Now, let's discuss the potential benefits of investing in TZA. One potential benefit is the ability to profit from a potential market downturn. If an investor believes that the small-cap market is going to decline, they may be able to profit from that decline by investing in TZA.

Another potential benefit is the ability to use TZA as a hedge against other investments. For example, if an investor has a portfolio of small-cap stocks and is concerned about a potential market downturn, they may choose to invest in TZA as a way to offset potential losses in their portfolio.

It's important to remember that investing in TZA, or any other ETF, carries risks and it's important to carefully evaluate those risks before making an investment.

In conclusion, the Direxion Daily Small Cap Bear 3X Shares ETF, ticker symbol TZA, is a bearish ETF that aims to provide three times the inverse daily performance of the Russell 2000 Index.