AMZU Let’s You Bet 200% On Amazon But That Doesn’t Mean You Should

Core Viewpoint - Direxion Daily AMZN Bull 2X Shares (AMZU) is designed for short-term traders due to its mechanics, which involve derivatives and daily rebalancing, rather than for income investors [3][7]. Group 1: Income Generation - AMZU does not generate income through traditional dividends but uses derivatives and swaps to achieve 200% exposure to Amazon's daily price movements [4]. - The fund received a $1.20 special dividend in December 2025, but this is offset by significant NAV erosion from volatility decay [4]. Group 2: Fund Structure and Performance - AMZU holds only 13.57% in direct Amazon equity, with the remainder in derivatives for daily 2x leverage, which resets daily [5]. - Over the past year, AMZU lost 23.15% while Amazon dropped only 1.64%, indicating a significant impact from volatility decay [6][8]. - Year-to-date through December 2025, Amazon gained 3.63%, which should theoretically yield a 7.26% return for AMZU, but the fund instead lost 13.99% due to a 21-percentage-point shortfall from volatility decay [9]. Group 3: Volatility and Market Impact - Recent volatility, including multiple 3-4% daily swings in Amazon's stock, exacerbated the decay as AMZU rebalances derivatives at unfavorable times [10].