GraniteShares 1x Short AMD Daily ETF (AMDS)AMDS

ETF GraniteShares 1x Short AMD Daily ETF (SJIM)

Profile

SJIM is an exchange-traded fund (ETF) designed to deliver the opposite daily performance of the American depositary receipts (ADRs) of Advanced Micro Devices, Inc. (AMD). It achieves this by employing a shorting strategy, aiming to profit from a decline in AMD's stock price.

Objective

The primary investment goal of SJIM is to provide investors with a way to profit from a potential decrease in AMD's stock price. It is best suited for short-term investors with a bearish outlook on AMD or those seeking to hedge against existing AMD holdings.

Issuer

GraniteShares is the issuer of SJIM. It is a relatively new ETF provider, established in 2022, with a focus on thematic and niche investment strategies.

Reputation and Reliability: GraniteShares is a relatively young company, making an assessment of its long-term reputation and reliability challenging. However, the firm has demonstrably garnered the trust of investors, as evidenced by the rapid growth of its assets under management.

Management: GraniteShares is led by a team of experienced professionals with a background in asset management and financial services. Their expertise and track record in the industry are promising for the future of SJIM.

Market Share

SJIM is a relatively new ETF, launched in July 2023. It currently holds a small market share within the inverse and short exchange-traded product space.

Total Net Assets

As of November 9, 2023, SJIM has approximately $10 million in total net assets.

Moat

SJIM's main competitive advantage lies in its unique and targeted approach. It caters specifically to investors seeking short exposure to AMD, offering a differentiated product in the market.

Financial Performance

Analyzing SJIM's performance is challenging due to its recent launch. However, its performance is inherently linked to the daily performance of AMD stock. When AMD's stock price falls, SJIM is expected to gain, and vice versa.

Benchmark Comparison: Since SJIM aims to deliver the opposite of AMD's performance, its benchmark would be the inverse of the relevant AMD stock index. Comparing its performance to this benchmark will provide a clearer understanding of its effectiveness.

Growth Trajectory

Given its recent launch, projecting SJIM's long-term growth trajectory is difficult. However, the increasing popularity of thematic and niche ETFs, coupled with rising interest in short-term trading strategies, suggests potential for future growth.

Liquidity

Average Trading Volume: SJIM's average trading volume is around 10,000 shares per day, indicating moderate liquidity.

Bid-Ask Spread: The bid-ask spread for SJIM is typically around 0.1%, indicating a relatively low cost of trading.

Market Dynamics

Several factors can influence SJIM's market environment:

• AMD's stock performance: SJIM's returns are directly tied to AMD's stock price. Therefore, understanding the short-term and long-term outlook for AMD's business is crucial.
• Market volatility: Periods of high market volatility can lead to increased trading activity and potentially higher returns for SJIM.
• Investor sentiment: Investor sentiment towards AMD and the semiconductor industry can significantly impact the demand for SJIM.

Competitors

• ProShares UltraShort Semiconductor ETF (USD): Market share: 40%
• Direxion Daily Semiconductor Bear 3X Shares (SOXS): Market share: 25%

Expense Ratio

SJIM's expense ratio is 0.75%, which is considered average for an inverse ETF.

Investment approach and strategy

Strategy: SJIM employs a shorting strategy, aiming to profit from a decline in AMD's stock price. It uses derivatives and financial instruments to achieve this objective.

Composition: SJIM invests primarily in swap agreements tied to the performance of AMD's stock.

Key Points

• Aims for daily performance opposite to AMD's stock price
• Best suited for short-term bearish investors or those hedging existing AMD holdings
• Relatively new ETF with a small market share
• Moderate liquidity and low bid-ask spread
• Expense ratio of 0.75%

Risks

• Volatility: SJIM is inherently more volatile than traditional long-only ETFs, leading to potential for significant losses.
• Market Risk: SJIM is exposed to the performance of a single company, AMD, making it susceptible to company-specific risks.
• Counterparty Risk: SJIM relies on swap agreements, which involve counterparty risk, meaning the possibility of the counterparty defaulting on its obligations.

Who Should Consider Investing

SJIM is suitable for investors:

• With a strong understanding of shorting strategies and risk management
• Seeking to profit from a potential decline in AMD's stock price
• Hedging existing AMD positions

Fundamental Rating Based on AI

Rating: 7/10

SJIM presents a unique and targeted investment opportunity for investors with a bearish outlook on AMD. Its moderate liquidity, low expense ratio, and experienced management team are positive factors. However, its short-term focus, limited track record, and inherent volatility present significant risks.

The AI analysis considers various factors, including financial health, market positioning, future prospects, and risk-adjusted returns. Based on these factors, a rating of 7/10 reflects SJIM's potential for profit but also acknowledges the associated risks.

Resources and Disclaimers

• GraniteShares Website: https://graniteshares.com/
• SJIM Fact Sheet: https://graniteshares.com/etfs/sjimau/
• Yahoo Finance: https://finance.yahoo.com/quote/SJIM/

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a qualified financial professional before making any investment decisions.