MSFD Profile
The Direxion Daily MSFT Bear 1X Shares is an exchange-traded fund (ETF) designed to provide investors with inverse exposure to the performance of Microsoft Corporation (MSFT). The fund employs a strategy that seeks to deliver returns that are -100% of the daily performance of MSFT, effectively allowing investors to profit from declines in Microsoft’s stock price. This inverse relationship is achieved through the use of swap agreements with major global financial institutions.
To accomplish its investment objective, the fund enters into swap agreements where it exchanges the return on an investment in MSFT with the financial institutions. These swap agreements are structured to reflect a daily inverse performance of -100% relative to the value of the fund’s net assets. This means that if Microsoft’s stock price declines, the value of the ETF is expected to increase by a corresponding amount, and vice versa.
The Direxion Daily MSFT Bear 1X Shares fund is non-diversified, concentrating its investments and strategies solely on Microsoft stock. This focused approach allows the fund to specifically target movements in MSFT’s stock price, offering a precise tool for investors who anticipate a decline in Microsoft’s performance. Due to its inverse exposure strategy, the fund is primarily used by traders and investors who seek short-term hedging opportunities or speculative positions based on MSFT’s price movements.
Investors in the Direxion Daily MSFT Bear 1X Shares should be aware of the inherent risks associated with inverse ETFs, including the potential for significant losses if the underlying asset, in this case Microsoft, does not perform as anticipated. The fund’s use of daily swap agreements and its non-diversified nature emphasize its role as a tactical investment vehicle rather than a long-term holding, suited for those with a short-term outlook on Microsoft’s stock performance.
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