DFEN is a daily 3x leveraged bet on the Dow Jones U.S. Select Aerospace and Defense Index, a market-cap-weighted index of US-listed aerospace and defense stocks. Unleveraged exposure to the same index can be found in ITA a fund from BlackRock. The geared 3x nature of DFEN is designed to magnify the daily performance of the index, not to return 300% of the index performance over extended periods of time. Due to compounding and the daily reset function, the fund is meant to be a trading vehicle for investors to make short-term bets on the direction of the aerospace and defense industry and not a long-term investment strategy. Compounding becomes more pronounced and more of a concern as holding periods increase, and the fund is likely to stray from the returns of the underlying index in such cases. Due to the fund`s day trading personality, trading volume and bid/ask spread are more important cost considerations than expense ratio.