SOXS May Pay a 20% Dividend, But It Lost 87% Betting Against Nvidia | SOXS NVDA Pays a 20% Dividend, But lost 87% ofBet Against NVIDIA, and Lost 87%

5 days ago 9

Michael Williams

Fri, December 12, 2025 astatine 10:11 AM CST 4 min read

24/7 Wall St.

SOXS declined 87% successful 2025 and mislaid 99.86% implicit 5 years contempt paying distributions.
The money generates income from currency collateral involvement and abbreviated presumption gains erstwhile semiconductors fall.
Daily rebalancing creates structural decay that overwhelms organisation income successful rising markets.
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Direxion Daily Semiconductor Bear 3x Shares (NYSEARCA:SOXS) offers a contrarian stake against the AI boom, delivering 3 times the inverse regular show of semiconductor stocks. While the ETF has attracted attraction for its dividend distributions, knowing however this money generates income reveals wherefore it's fundamentally antithetic from accepted dividend investments.

SOXS doesn't clasp semiconductor stocks oregon cod dividends from companies similar NVIDIA (NASDAQ:NVDA) oregon Advanced Micro Devices (NASDAQ:AMD). Instead, the money uses derivatives including swaps and futures to execute -3x regular vulnerability to the ICE Semiconductor Index. Approximately 66% of the fund's $1.1 cardinal successful assets sits successful currency collateral, chiefly Goldman Sachs (NYSE:GS) Treasury Instruments, generating involvement income. Additional distributions travel from gains erstwhile semiconductor stocks diminution and the money profits from abbreviated positions.

The money paid $0.056 per stock successful its September 2025 distribution. Based connected the existent terms of $2.95, this translates to an annualized output of astir 7.6%. Some sources mention yields approaching 20% by projecting guardant based connected humanities volatility successful distributions, which ranged from $0.056 to $0.185 quarterly passim 2025.

SOXS distributions are highly unstable due to the fact that they beryllium connected 2 volatile factors: involvement rates connected currency collateral and gains from semiconductor banal declines. When semiconductors rally, arsenic they person passim 2025, the money generates minimal profits from abbreviated positions portion experiencing terrible terms decay from regular rebalancing costs.

The fund's 0.97% disbursal ratio and regular reset mechanics make structural headwinds. SOXS has declined 87% year-to-date successful 2025, falling from $22.12 to $2.95. Over 5 years, the money has mislaid 99.86% of its value. A 10% output provides small consolation erstwhile the underlying ETF loses 87% of its value.

The underlying semiconductor stocks SOXS bets against stay financially robust. NVIDIA trades astatine a P/E of 45x with 53% nett margins and generated $31.9 cardinal successful nett income past quarter. AMD posted 35.6% year-over-year gross maturation successful Q3 2025. Broadcom (NASDAQ:AVGO) maintains 53% nett margins, portion Qualcomm (NASDAQ:QCOM) returned $3.4 cardinal to shareholders done dividends and buybacks. These companies wage minimal dividends (0.02% to 1.98% yields) due to the fact that they're reinvesting successful growth.