Two mirror-image leveraged ETFs tracking Super Micro Computer have both lost money over the past year, illustrating how daily resets on volatile single-stock bets can erode capital regardless of direction.

What happened: Defiance ETFs offers SMCX (2× long) and SMCZ (2× short) — opposing leveraged bets on Super Micro Computer using daily-reset equity swaps. Over the past year, SMCI fell 29.75%, yet SMCZ is down 81.64% and SMCX is down 86.79%. In a single week ending June 12, 2026, after Super Micro announced a $7 billion（約1.1兆円） equity and preferred offering, SMCI fell 26.85%, SMCZ gained 41.06%, and SMCX fell 55.81%.

Why it matters: Both funds are structured to suffer from volatility drag — daily resets compound losses whenever Super Micro's price moves sharply in either direction over multi-week periods. Neither product is meant for buy-and-hold investors; they are tactical same-day trades. The bear case for SMCI (which SMCZ bets on) includes governance and regulatory risks tied to a legal indictment related to illegal AI server shipments to China, margin pressure, and customer concentration, according to Wolfe Research.

What to watch: Neither fund suits a longer holding period. SMCX expense ratio is 1.31% (per October 2025 semi-annual report); SMCZ carries approximately 1.29%. Both carry counterparty risk through swap agreements, and SMCZ has experienced trading disruptions during extreme Super Micro volatility in 2026.