SPXS Direxion Daily S&P 500 Bear 3X Shares
SPXS Fund Description
The Daily S&P 500 Bear 3X provides 3x inverse exposure to a market-cap-weighted index of 500 of the largest and most liquid US companies.
SPXS FactSet Analytics Insight
SPXS is an extremely aggressive bet against
“an extremely aggressive bet against the S&P 500” the S&P 500, promising to provide -300% of the index’s return for a one-day period. The fund, like most geared inverse products, is designed to deliver its 3x inverse exposure to the S&P 500—a cap-weighted basket of 500 of the largest firms in the U.S.—for one trading day. Holding it for a period longer than that will introduce the effects of compounding, a dynamic that’s increasingly pronounced as you add more leverage to the strategy. If the fund is held more than one day, your position will need to be adjusted daily to maintain the -3x multiple. SPXS is both more expensive and less liquid than its competitor, SPXU. The first point is not critical, since the product is designed to be held for a day, but the inferior liquidity is a real concern. Roughly $50M trades most days (vs. $140M for SPXU), at spreads of 4 bps (vs. 2 bps for SPXU). Investors should be comfortable with not just the mechanics of the portfolio but the counterparty risk it takes on to get its exposure: SPXS holds swaps on the index to achieve its goals.
|Performance [as of 04/27/16]||1 Month||3 Month||YTD||1 Year||3 Years||5 Years||10 Years|
SPXS FactSet Analytics Block Liquidity
This measurement shows how easy it is to trade 25,000 shares of SPXS. SPXS is rated a 5 out of 5.