Direxion Daily Utilities Bull 3X Shares

Direxion Daily Utilities Bull 3X Shares (UTSL) is a leveraged ETF. It aims to deliver three times the daily return of the Utilities Select Sector Index, a basket of utility stocks drawn from the S&P 500. Because it resets its leverage every day, returns over weeks or months can differ sharply from three times the index. It costs 0.97% a year and is built for short-term trading, not buy-and-hold.

• Over the year to Oct 27, 2026, UTSL returned -25.5%.
• Its 5-year annualized return was +4.8%.
• Its worst full calendar year was 2023 (-35.5%); its best was 2024 (+54.3%).
• The deepest fall in its price history was 68% (Apr 8, 2022 to Oct 2, 2023), recovered by Oct 3, 2025.

As of Jul 31, 2026, most of the fund sat in cash, Treasury bills and money-market holdings (25.06% of net assets), with its exposure coming from 5 swap and futures positions rather than from owning the stocks outright.

• Over the three months to Jul 31, 2026, investors added a net $1.5M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -15.85%, +6.48%, -7.93%.

The fund tracks the Utilities Select Sector Index from S&P Dow Jones Indices, one of eleven Select Sector indexes. Every member must be in the S&P 500. Members come from electric, water, gas and multi-utilities and from independent power and renewable electricity producers. Bigger companies get bigger weights, but the largest single-stock weights can be trimmed to meet US tax rules. As of December 31, 2025, the index had 31 members. It is rebalanced every quarter.

To get three times the exposure, the fund combines direct stock holdings with swaps, which are contracts with banks that pay the index's return. As of July 31, 2026, stocks made up about 77.5% of net assets. The largest were NextEra Energy (10.2%), Southern Co. (6.0%) and Duke Energy (5.5%). About 25% sat in cash and short-term instruments, and swaps on the index supplied the extra exposure. If a swap bank fails to pay, the fund loses money.

At each market close, the adviser, Rafferty Asset Management, resets the fund's exposure. It adds exposure after up days and cuts it after down days. Over longer periods, each day's return compounds, so the result will very likely not be three times the index's return. The prospectus warns the fund will lose money if the index ends flat, and can lose even when the index rises.

• UTSL charges 0.97% a year.
• Of that, 0.75% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.01% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $99 in the first year and $1,200 over 10 years (assuming a 5% annual return).

The fund targets three times the index's return for a single day only, and daily compounding makes long holding periods unpredictable.

Leverage magnifies losses as well as gains. UTSL's worst quarter was a 53.29% drop in the three months to March 31, 2020. Its worst full calendar year was 2020, when it lost 38.91%. In the 2022 bear market, it fell 52.4% between April 8 and October 12, 2022. Its deepest drop, 68%, lasted until October 2, 2023, and it did not regain its earlier peak until October 3, 2025. Anyone who had to sell or draw income during that stretch would have locked in heavy losses. It pays quarterly, with a trailing yield of 2.53% as of October 27, 2026. That income is small next to its 47.4% one-year volatility, a measure of how widely its price swings. In the SEC's standard example, $10,000 would pay $1,200 in fees over 10 years. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by leveraged/inverse funds on the same index (the index could not be identified from the name).

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