Direxion Daily Energy Bear 2X Shares

Direxion Daily Energy Bear 2X Shares (ERY) uses swaps to try to deliver twice the opposite of the Energy Select Sector Index's return for a single day. That index holds the energy companies in the S&P 500. The fund resets its exposure every day, so over weeks or years its results can drift far from -2x the index. It lost 99% over the 10 years ended October 27, 2026, and it charges 0.99% a year.

• Over the year to Oct 27, 2026, ERY returned -62.1%, 1st of 7 among similar funds.
• Its 5-year annualized return was -39.6% and its 10-year -34.7%.
• In the 2020 COVID crash, while stocks fell, it gained 472.6%.
• Its worst full calendar year was 2022 (-73.6%); its best was 2018 (+46.7%).
• The deepest fall in its price history was 100% (Nov 20, 2008 to Oct 26, 2026), not yet recovered.

As of Jul 31, 2026, most of the fund sat in cash, Treasury bills and money-market holdings (115.15% of net assets), with its inverse exposure coming from 4 swap and futures positions rather than from owning the stocks outright.

• Over the three months to Jul 31, 2026, investors withdrew a net $4.5M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +11.18%, +10.01%, -20.49%.

ERY is built around the Energy Select Sector Index from S&P Dow Jones Indices. It is one of eleven Select Sector indexes. It includes only S&P 500 companies in oil, gas and consumable fuels, and in energy equipment and services, as sorted by the Global Industry Classification Standard (GICS). Bigger companies get bigger weights, but single-stock weights are trimmed to meet tax rules. The index had 22 members as of December 31, 2025, and is rebalanced quarterly.

The fund does not own these stocks. At least 80% of its net assets go into instruments that together give it -2x daily exposure to the index, mainly swaps and futures. A swap is a contract in which a bank pays the fund based on the index's moves. As of July 31, 2026, the fund held four swaps on the index, with the rest in cash and cash-like holdings such as money market funds and short-term government debt. If a swap bank fails to pay, the fund can lose money.

At each market close, Rafferty Asset Management resets the fund's exposure. Each day's return compounds on the last, so results over longer periods will very likely differ from -2x the index. The fund loses money if the index ends flat, and it can lose even when the index falls. The fund also creates and redeems shares for cash, which makes it less tax-efficient than most ETFs.

• ERY charges 0.99% a year.
• Of that, 0.75% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.05% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $101 in the first year and $1,266 over 10 years (assuming a 5% annual return).

The prospectus says the fund aims only at one-day results, and holding it long term has wiped out nearly all of its value since launch.

ERY launched in November 2008, after most of the 2008 crash, so it has no record for that downturn. In the 2020 COVID crash, as energy stocks collapsed, it gained about 473% from the market's February peak to its March low. Even so, it fell 26% in two days along the way. In the 2022 bear market it lost about 64% as energy stocks rallied, and 2022 was its worst calendar year at -73.6%. Its deepest decline ran from November 2008 to October 2026, erased close to 100% of its value and has not recovered. Anyone forced to draw money out during a bad stretch could lock in deep losses.

The trailing yield was 4.04% as of October 27, 2026, paid quarterly. That income is small next to the fund's 62.1% one-year price loss. The fund costs 0.99% a year. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by leveraged/inverse funds on the same index (energy), same direction.