FAZ vs. SMH
FAZ (Direxion Daily Financial Bear 3X Shares) and SMH (VanEck Semiconductor ETF) are both exchange-traded funds - FAZ is a Leveraged Equities fund tracking the Russell 1000 Financial Services Index (-300%), while SMH is a Semiconductors fund tracking the MVIS US Listed Semiconductor 25 Index. Both are passively managed. Over the past 10 years, FAZ returned -44.22%/yr vs 35.93%/yr for SMH. At a correlation of -0.56, they often move in opposite directions. FAZ charges 1.07%/yr vs 0.35%/yr for SMH.
Performance
FAZ vs. SMH - Performance Comparison
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Returns By Period
In the year-to-date period, FAZ achieves a -9.37% return, which is significantly lower than SMH's 62.61% return. Over the past 10 years, FAZ has underperformed SMH with an annualized return of -44.22%, while SMH has yielded a comparatively higher 35.93% annualized return.
FAZ
- 1D
- -1.91%
- 1M
- -14.72%
- 6M
- -6.80%
- YTD
- -9.37%
- 1Y
- -20.83%
- 3Y*
- -40.21%
- 5Y*
- -32.04%
- 10Y*
- -44.22%
SMH
- 1D
- -4.16%
- 1M
- -5.54%
- 6M
- 49.91%
- YTD
- 62.61%
- 1Y
- 104.33%
- 3Y*
- 55.82%
- 5Y*
- 36.02%
- 10Y*
- 35.93%
FAZ vs. SMH - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
FAZ Direxion Daily Financial Bear 3X Shares | -9.37% | -37.21% | -51.01% | -26.67% | 1.16% | -67.05% | -73.90% | -58.62% | 16.84% | -46.18% |
SMH VanEck Semiconductor ETF | 62.61% | 49.17% | 39.10% | 73.38% | -33.53% | 42.13% | 55.53% | 64.45% | -9.05% | 38.48% |
Correlation
The correlation between FAZ and SMH is -0.16, meaning they tend to move in opposite directions. This is especially valuable for risk management - when one declines, the other has historically tended to hold steady or rise.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | -0.16 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.27 |
Correlation (5Y) Calculated over the trailing 5-year period | -0.44 |
Correlation (10Y) Calculated over the trailing 10-year period | -0.48 |
Correlation (All Time) Calculated using the full available price history since Nov 19, 2008 | -0.56 |
Over the past year, the inverse relationship between FAZ and SMH has weakened: their correlation has moved from -0.56 to -0.16, meaning they move in opposite directions less often than they have historically.
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Return for Risk
FAZ vs. SMH — Risk / Return Rank
FAZ
SMH
FAZ vs. SMH - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Direxion Daily Financial Bear 3X Shares (FAZ) and VanEck Semiconductor ETF (SMH). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| FAZ | SMH | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -3.34 | ||
| Sortino ratioReturn per unit of downside risk | -3.60 | ||
| Omega ratioGain probability vs. loss probability | 0.95 | 1.43 | -0.48 |
| Calmar ratioReturn relative to maximum drawdown | -0.54 | 7.03 | -7.57 |
| Martin ratioReturn relative to average drawdown | -1.31 | 22.83 | -24.13 |
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Drawdowns
FAZ vs. SMH - Drawdown Comparison
The maximum FAZ drawdown since its inception was -100.00%, which is greater than SMH's maximum drawdown of -84.96%. Use the drawdown chart below to compare losses from any high point for FAZ and SMH.
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Drawdown Indicators
| FAZ | SMH | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -100.00% | -84.96% | -15.04% |
Max Drawdown (1Y)Largest decline over 1 year | -38.56% | -14.93% | -23.63% |
Max Drawdown (3Y)Largest decline over 3 years | -83.83% | -35.74% | -48.09% |
Max Drawdown (5Y)Largest decline over 5 years | -87.70% | -45.30% | -42.40% |
Max Drawdown (10Y)Largest decline over 10 years | -99.71% | -45.30% | -54.41% |
Current DrawdownCurrent decline from peak | -100.00% | -12.45% | -87.55% |
Average DrawdownAverage peak-to-trough decline | -99.12% | -40.94% | -58.18% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 15.97% | 4.59% | +11.38% |
Volatility
FAZ vs. SMH - Volatility Comparison
The current volatility for Direxion Daily Financial Bear 3X Shares (FAZ) is 12.94%, while VanEck Semiconductor ETF (SMH) has a volatility of 18.45%. This indicates that FAZ experiences smaller price fluctuations and is considered to be less risky than SMH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| FAZ | SMH | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 12.94% | 18.45% | -5.51% |
Volatility (6M)Calculated over the trailing 6-month period | 33.63% | 31.29% | +2.34% |
Volatility (1Y)Calculated over the trailing 1-year period | 44.06% | 36.76% | +7.30% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 55.56% | 36.19% | +19.37% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 61.85% | 33.14% | +28.71% |
FAZ vs. SMH - Expense Ratio Comparison
FAZ has a 1.07% expense ratio, which is higher than SMH's 0.35% expense ratio.
Dividends
FAZ vs. SMH - Dividend Comparison
FAZ's dividend yield for the trailing twelve months is around 3.41%, more than SMH's 0.19% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
FAZ Direxion Daily Financial Bear 3X Shares | 3.41% | 5.07% | 7.34% | 4.88% | 0.00% | 0.00% | 0.62% | 1.63% | 0.56% | 0.00% | 0.00% | 0.00% |
SMH VanEck Semiconductor ETF | 0.19% | 0.31% | 0.44% | 0.60% | 1.18% | 0.51% | 0.69% | 1.50% | 1.88% | 1.43% | 0.80% | 2.14% |
Frequently Asked Questions
FAZ and SMH have a correlation of -0.16, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
SMH has higher volatility (18.45%) compared to FAZ (12.94%). In terms of maximum drawdown, FAZ dropped -100.00% vs SMH's -84.96%.
On 10-year performance, SMH leads with 35.93% vs -44.22% for FAZ. On fees, SMH is cheaper at 0.35% per year. On volatility, FAZ has been the lower-risk option at 12.94%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, SMH has performed better with a 35.93% return vs -44.22%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
SMH is cheaper with a 0.35% expense ratio, compared with 1.07% for FAZ.
FAZ has the higher dividend yield at 3.41%, compared with 0.19% for SMH.
FAZ is categorized as Leveraged Equities, while SMH is Semiconductors. FAZ tracks Russell 1000 Financial Services Index (-300%), while SMH tracks MVIS US Listed Semiconductor 25 Index. They also come from different issuers: Direxion and VanEck. Their fees differ too: 1.07% for FAZ and 0.35% for SMH.
SMH currently has the higher Sharpe Ratio (2.86 vs -0.48), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
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