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%

By Michael Williams Published Dec 12, 10:11AM EST

Quick Read

SOXS declined 87% in 2025 and lost 99.86% over five years despite paying distributions.
The fund generates income from cash collateral interest and short position gains when semiconductors fall.
Daily rebalancing creates structural decay that overwhelms distribution income in rising markets.

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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% — © 24/7 Wall St.

Direxion Daily Semiconductor Bear 3x Shares (NYSEARCA:SOXS) offers a contrarian bet against the AI boom, delivering three times the inverse daily performance of semiconductor stocks. While the ETF has attracted attention for its dividend distributions, understanding how this fund generates income reveals why it’s fundamentally different from traditional dividend investments.

How SOXS Generates Such High Distributions

SOXS doesn’t hold semiconductor stocks or collect dividends from companies like NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) or Advanced Micro Devices (NASDAQ:AMD). Instead, the fund uses derivatives including swaps and futures to achieve -3x daily exposure to the ICE Semiconductor Index. Approximately 66% of the fund’s $1.1 billion in assets sits in cash collateral, primarily Goldman Sachs (NYSE:GS) Treasury Instruments, generating interest income. Additional distributions come from gains when semiconductor stocks decline and the fund profits from short positions.

The fund paid $0.056 per share in its September 2025 distribution. Based on the current price of $2.95, this translates to an annualized yield of approximately 7.6%. Some sources cite yields approaching 20% by projecting forward based on historical volatility in distributions, which ranged from $0.056 to $0.185 quarterly throughout 2025.

Distribution Sustainability and Total Return Reality

SOXS distributions are highly unstable because they depend on two volatile factors: interest rates on cash collateral and gains from semiconductor stock declines. When semiconductors rally, as they have throughout 2025, the fund generates minimal profits from short positions while experiencing severe price decay from daily rebalancing costs.

The fund’s 0.97% expense ratio and daily reset mechanism create structural headwinds. SOXS has declined 87% year-to-date in 2025, falling from $22.12 to $2.95. Over five years, the fund has lost 99.86% of its value. A 10% yield provides little consolation when the underlying ETF loses 87% of its value.

About the Author Michael Williams →

I am a long time investor and student of business, and believe finding good companies that can become great investments is the best game on earth. After 20 years of writing and researching the public markets it is clear that individuals have never had more tools and information to take control of their financial lives. From ETFs and $0 commissions to cryptos and prediction markets there has never been a greater democratization of access to investing.

I write to help people understand the investments available to them so they can make the best choice for their portfolio, whether they're starting out or looking for income in retirement.