FAZ makes a big and bearish one-day bet against large-cap US financials stocks. It provides -3x exposure to a market cap-weighted index that captures the financials segment of the S&P 500. To gain inverse exposure to the index, FAZ invests in swap agreements, futures contracts, and short positions on the index. As a leveraged product, FAZ is not a buy-and-hold ETF, it is a short-term tactical instrument. The fund rebalances daily. As a result, compounding and path dependency make its long-term returns difficult to predict when compared with its underlying index. Over longer periods, returns can vary significantly from -3x exposure to its underlying index. Prior to February 28, 2022, the fund tracked the Russell 1000 Financials Services Index. On August 1, 2022, the fund ceased tracking the Russell 1000 Financials 40 Act 15/22.5 Daily Capped Index.
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