TZA 3x Short
Direxion Daily Small Cap Bear 3X Shares
Shorts: Russell 2000 (IWM)
Expense Ratio
1.08%
Leverage
3x Inverse
Issuer
Direxion
Inception
Nov 2008
TZA ETF Fact Check
| What it is | TZA is Direxion Daily Small Cap Bear 3X Shares, an inverse ETF tied to Russell 2000 (IWM). |
|---|---|
| Daily target | 3x Inverse exposure before fees, expenses, tracking error, and daily compounding effects. |
| Cost check | Expense ratio shown here: 1.08%. Verify the latest fee, holdings, and prospectus on the issuer page before trading. |
| Holding-period check | Leveraged inverse ETFs are designed around daily objectives; multi-day returns can diverge sharply from the simple inverse multiple. |
Source checks: Direxion ETF pages for current fund documents and the SEC/FINRA leveraged and inverse ETF bulletin for daily reset risk. Inception shown here: Nov 2008.
High Risk Leveraged Product
TZA is a 3x leveraged inverse ETF designed for short-term trading only. Daily rebalancing causes significant decay over time. NOT suitable for buy-and-hold investors.
What TZA Shorts
TZA seeks daily investment results, before fees and expenses, that correspond to 300% of the inverse (opposite) of the daily performance of the Russell 2000 Index.
It uses financial derivatives like swaps and futures to achieve its goal, making it a tool for short-term bearish bets or hedging against declines in small-cap U.S. stocks.
Key Risks
- Leverage Risk: The 3x daily target magnifies losses and increases volatility.
- Compounding Risk: Daily reset can cause significant divergence from 3x the index's return over longer periods.
- Small-Cap Market Risk: The underlying Russell 2000 can be more volatile than large-cap indices.
- High Expense Ratio: The 1.08% fee erodes returns over time.
- Short-Term Holding Period: Designed for daily use, not long-term investment.
Best Use Cases
- Short-term hedging against a decline in small-cap U.S. stocks.
- Speculative, tactical bearish bets on the small-cap sector for a single day or few days.
- Portfolio diversification for sophisticated investors seeking inverse exposure.
- Paired with a long small-cap position to temporarily reduce net exposure.