1-Star ETFs Poised to Plunge: Direxion 7-10 Year Treasury Bull 3x?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Direxion Daily 7-10 Year Treasury Bull 3x Shares ETF (NYSE: TYD  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Direxion Daily 7-10 Year and see what CAPS investors are saying about the ETF right now.

Direxion Daily 7-10 Year facts

Inception November 2008
Total Net Assets $4.1 million
Investment Approach Seeks daily investment results of 300% of the performance of the NYSE 7-10 Year Treasury Bond Index. Bonds eligible for inclusion must be: U.S. Treasury Bonds; bullet or callable issues with fixed coupon payments; denominated in U.S. dollars; and have a maturity of 7-10 years at issuance.
Expense Ratio 0.95%
Year-to-Date / 1-Year / 3-Year Returns 6% / 10.5% / 22.2%
Alternatives ProShares Ultra 7-10 Year Treasury
Direxion Daily 20+ Year Treasury Bull 3x

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 91% of the 152 members who have rated Direxion Daily 7-10 Year believe the ETF will underperform the S&P 500 going forward.

Just last month, one of those Fools, All-Star TerryHogan, succinctly summed up the bear case for our community:

In 1986, Sammy Hagar thought that he could have the "Best of Both Worlds." With this ETF, you can have the worst of both worlds -- the volatility induced degradation of a leveraged ETF, combined with the crappy yield of a bond fund. We'll throw in [a 0.95% expense ratio] for free!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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