MSFD vs. SMST

Last updated Jun 4, 2026

MSFD (Direxion Daily MSFT Bear 1X Shares) and SMST (Defiance Daily Target 2X Short MSTR ETF) are both Inverse Equities funds. MSFD is passively managed, while SMST is actively managed. Over the past year, MSFD returned 7.43% vs 73.40% for SMST. At a 0.30 correlation, their price movements are largely independent. MSFD charges 1.06%/yr vs 1.29%/yr for SMST.

Performance

MSFD vs. SMST - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Direxion Daily MSFT Bear 1X Shares (MSFD) and Defiance Daily Target 2X Short MSTR ETF (SMST). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, MSFD achieves a 10.43% return, which is significantly higher than SMST's -49.49% return.

MSFD

• 1D: 3.26%
• 1M: -3.86%
• YTD: 10.43%
• 6M: 9.36%
• 1Y: 7.43%
• 3Y*: -7.16%
• 5Y*: —
• 10Y*: —

SMST

• 1D: 13.96%
• 1M: 85.04%
• YTD: -49.49%
• 6M: -27.60%
• 1Y: 73.40%
• 3Y*: —
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

MSFD vs. SMST - Yearly Performance Comparison

	2026 (YTD)	2025	2024
MSFD Direxion Daily MSFT Bear 1X Shares	10.43%	-13.36%	1.59%
SMST Defiance Daily Target 2X Short MSTR ETF	-49.49%	-44.36%	-90.90%

Correlation

The correlation between MSFD and SMST is 0.28, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.28
Correlation (All Time) Calculated using the full available price history since Aug 22, 2024	0.30

Return for Risk

MSFD vs. SMST — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

MSFD

MSFD Risk / Return Rank: 13
MSFD Sharpe Ratio Rank: 13
MSFD Sortino Ratio Rank: 14
MSFD Omega Ratio Rank: 14
MSFD Calmar Ratio Rank: 13
MSFD Martin Ratio Rank: 13

SMST

SMST Risk / Return Rank: 24
SMST Sharpe Ratio Rank: 18
SMST Sortino Ratio Rank: 31
SMST Omega Ratio Rank: 32
SMST Calmar Ratio Rank: 21
SMST Martin Ratio Rank: 18

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

MSFD vs. SMST - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Direxion Daily MSFT Bear 1X Shares (MSFD) and Defiance Daily Target 2X Short MSTR ETF (SMST). 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.

	MSFD	SMST	Difference
Sharpe ratio: Return per unit of total volatility	0.29	0.52	-0.23
Sortino ratio: Return per unit of downside risk	0.63	1.63	-0.99
Omega ratio: Gain probability vs. loss probability	1.08	1.21	-0.13
Calmar ratio: Return relative to maximum drawdown	0.32	0.86	-0.54
Martin ratio: Return relative to average drawdown	0.89	1.81	-0.91
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

MSFD vs. SMST - Sharpe Ratio Comparison

The current MSFD Sharpe Ratio is 0.29, which is lower than the SMST Sharpe Ratio of 0.52. The chart below compares the historical Sharpe Ratios of MSFD and SMST, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	MSFD	SMST	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.29	0.52	-0.23
Sharpe Ratio (All Time) Calculated using the full available price history	-0.51	-0.52	+0.01

Drawdowns

MSFD vs. SMST - Drawdown Comparison

The maximum MSFD drawdown since its inception was -59.90%, smaller than the maximum SMST drawdown of -99.25%. Use the drawdown chart below to compare losses from any high point for MSFD and SMST.

Drawdown Indicators

	MSFD	SMST	Difference
Max Drawdown Largest peak-to-trough decline	-59.90%	-99.25%	+39.35%
Max Drawdown (1Y) Largest decline over 1 year	-23.25%	-85.39%	+62.14%
Max Drawdown (3Y) Largest decline over 3 years	-40.50%	—	—
Current Drawdown Current decline from peak	-50.20%	-98.02%	+47.82%
Average Drawdown Average peak-to-trough decline	-41.59%	-90.67%	+49.08%
Ulcer Index Depth and duration of drawdowns from previous peaks	8.40%	40.73%	-32.33%

Volatility

MSFD vs. SMST - Volatility Comparison

The current volatility for Direxion Daily MSFT Bear 1X Shares (MSFD) is 10.12%, while Defiance Daily Target 2X Short MSTR ETF (SMST) has a volatility of 37.33%. This indicates that MSFD experiences smaller price fluctuations and is considered to be less risky than SMST based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	MSFD	SMST	Difference
Volatility (1M) Calculated over the trailing 1-month period	10.12%	37.33%	-27.21%
Volatility (6M) Calculated over the trailing 6-month period	22.06%	126.48%	-104.42%
Volatility (1Y) Calculated over the trailing 1-year period	25.32%	140.93%	-115.61%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	26.15%	166.79%	-140.64%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	26.15%	166.79%	-140.64%

MSFD vs. SMST - Expense Ratio Comparison

MSFD has a 1.06% expense ratio, which is lower than SMST's 1.29% expense ratio.

Dividends

MSFD vs. SMST - Dividend Comparison

MSFD's dividend yield for the trailing twelve months is around 2.83%, while SMST has not paid dividends to shareholders.

Position	TTM	2025	2024	2023	2022
MSFD Direxion Daily MSFT Bear 1X Shares	2.83%	3.33%	4.46%	4.43%	0.74%
SMST Defiance Daily Target 2X Short MSTR ETF	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both MSFD and SMST in my portfolio?

MSFD and SMST have a correlation of 0.28, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, MSFD or SMST?

SMST has higher volatility (37.33%) compared to MSFD (10.12%). In terms of maximum drawdown, MSFD dropped -59.90% vs SMST's -99.25%.

Which ETF is better, MSFD or SMST?

On 1-year performance, SMST leads with 73.40% vs 7.43% for MSFD. On fees, MSFD is cheaper at 1.06% per year. On volatility, MSFD has been the lower-risk option at 10.12%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, MSFD or SMST?

Over the 1-year period, SMST has performed better with a 73.40% return vs 7.43%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, MSFD or SMST?

MSFD is cheaper with a 1.06% expense ratio, compared with 1.29% for SMST.

Which ETF pays a higher dividend yield, MSFD or SMST?

MSFD has the higher dividend yield at 2.83%, compared with 0.00% for SMST.

What is the main difference between MSFD and SMST?

They also come from different issuers: Direxion and Defiance. Their fees differ too: 1.06% for MSFD and 1.29% for SMST.

Which has better risk-adjusted returns?

SMST currently has the higher Sharpe Ratio (0.52 vs 0.29), 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.