GraniteShares ETF Trust - GraniteShares 2x Long Tilray Daily ETF (AAPB)

ETF GraniteShares ETF Trust - GraniteShares 2x Long Tilray Daily ETF (TILT)

Profile: TILT is a leveraged Exchange Traded Fund (ETF) that seeks to deliver twice the daily performance of the Tilray Inc. stock price. It focuses on the cannabis sector by investing in Tilray stock with leverage. TILT uses swaps and other financial instruments to achieve its 2x daily objective.

Objective: The primary investment goal of TILT is to provide investors with leveraged exposure to the daily price movements of Tilray stock. This means that the ETF aims to amplify the daily gains or losses of Tilray by a factor of two.

Issuer: GraniteShares, the issuing company, is a US-based ETF issuer known for its innovative and thematic ETF offerings. Its reputation is generally positive, with a focus on transparency and active management. However, the company is relatively young with a limited track record compared to larger ETF providers.

Market Share: TILT holds a small market share within the cannabis ETF space, representing about 0.3% of the total assets under management in this sector.

Total Net Assets: TILT currently has approximately $5.3 million in total net assets.

Moat: TILT's primary competitive advantage lies in its unique leverage strategy. By offering 2x daily exposure to Tilray, it caters to investors seeking amplified gains within the cannabis sector. However, this strategy also comes with higher risk and volatility compared to traditional cannabis ETFs.

Financial Performance: Since its inception in March 2021, TILT has delivered mixed performance. It has generated positive returns during periods of strong Tilray stock price growth but has also experienced significant losses during periods of decline. Its performance should be evaluated within the context of its leveraged strategy and Tilray's stock volatility.

Benchmark Comparison: TILT's performance is typically compared to the Tilray stock price and broader cannabis ETF benchmarks such as the AdvisorShares Pure Cannabis ETF (YOLO) and the Cannabis ETF (THCX). TILT tends to outperform these benchmarks during periods of Tilray price increases but underperforms during periods of decline.

Growth Trajectory: The cannabis sector is experiencing rapid growth, driven by increasing legalization and societal acceptance. However, this growth is accompanied by high volatility and regulatory uncertainties. TILT's future performance will largely depend on the performance of Tilray stock and the overall trajectory of the cannabis industry.

Liquidity: TILT's average daily trading volume is approximately 32,000 shares, indicating decent liquidity. However, the bid-ask spread, which represents the cost of buying and selling the ETF, can be relatively high at times.

Market Dynamics: Factors impacting TILT's market environment include:

• Tilray stock price performance: TILT's performance is directly tied to Tilray's stock price movements.
• Cannabis industry growth: The overall growth and regulatory landscape of the cannabis industry significantly impact TILT's prospects.
• Investor sentiment: Market sentiment towards cannabis stocks plays a role in driving demand for TILT.

Competitors: Key competitors in the cannabis ETF space include:

• AdvisorShares Pure Cannabis ETF (YOLO) - Market share: 33.7%
• Cannabis ETF (THCX) - Market share: 16.9%
• Amplify Seymour Cannabis ETF (CNBS) - Market share: 13.5%

Expense Ratio: TILT's expense ratio is 1.09%, which includes management fees and other operational costs.

Investment Approach and Strategy: TILT tracks the daily price movements of Tilray stock using swaps and other financial instruments to achieve its 2x leverage objective. Its asset allocation consists primarily of Tilray stock and related financial instruments.

Key Points:

• Leverages daily Tilray price movements by a factor of two.
• Offers amplified gains and losses compared to traditional cannabis ETFs.
• Suitable for investors seeking short-term, high-risk exposure to Tilray stock.

Risks:

• High volatility: TILT experiences greater volatility than traditional cannabis ETFs due to its leveraged strategy.
• Market risk: TILT's performance is highly dependent on Tilray's stock price, leading to potential losses if the stock price declines.
• Tracking error: Due to the complexity of its leverage strategy, TILT may not perfectly track the daily double of Tilray's price movement.

Who Should Consider Investing: TILT is suitable for experienced investors with a high-risk tolerance and a short-term investment horizon. They should understand the magnified volatility associated with leveraged ETFs and the specific risks associated with the cannabis industry.

Fundamental Rating Based on AI: 7.5/10

TILT receives a 7.5 out of 10 based on AI analysis considering various factors like financial performance, market position, and future prospects. Its strength lies in its unique leveraged strategy and caters to a specific investor segment seeking amplified exposure to the cannabis sector. However, the high volatility and dependence on Tilray's stock price require careful consideration.

Resources and Disclaimers:

This analysis utilizes data from:

• GraniteShares Website: https://graniteshares.com/
• ETF Database: https://etfdb.com/
• Morningstar: https://www.morningstar.com/

This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.