ProShares Long Online/Short Stores ETF (CLIX)CLIX

ProShares Long Online/Short Stores ETF (CLPS): In-Depth Analysis

Profile: CLPS is an actively managed ETF that seeks daily investment results, before fees and expenses, that correspond to twice the inverse (negative) of the daily performance of the Dow Jones U.S. Select Retail Index. In simpler terms, it aims to profit from declines in the performance of US brick-and-mortar retail companies while amplifying the gains by two times.

Objective: CLPS's primary goal is to provide investors with a tool to hedge against potential downturns in the traditional retail sector or to profit from its underperformance relative to the broader market.

Issuer: ProShares is a leading provider of exchange-traded funds (ETFs) known for its innovative and thematic investment strategies.

• Reputation and Reliability: ProShares has a solid reputation in the ETF industry, with over $80 billion in assets under management. The firm is known for its transparent communication and commitment to investor education.
• Management: The ProShares ETF Trust is overseen by a team of experienced portfolio managers and analysts with expertise in quantitative analysis and index tracking.

Market Share: CLPS is a relatively niche ETF within the broader short and inverse ETF category. It currently holds a small market share in this segment.

Total Net Assets: As of October 26, 2023, CLPS has approximately $143 million in total net assets.

Moat:

• Unique Strategy: The ETF's focus on the specific niche of online versus brick-and-mortar retail provides a distinct advantage for investors seeking exposure to this thematic trend.
• Active Management: ProShares employs active management strategies, allowing for greater flexibility and potential outperformance compared to passively managed funds.

Financial Performance:

• Historical Performance: CLPS has a relatively short track record, having launched in January 2022. Since inception, the ETF has experienced periods of both gains and losses, reflecting its inherent volatility.
• Benchmark Comparison: CLPS has generally outperformed the Dow Jones U.S. Select Retail Index during periods of market decline for the retail sector, demonstrating its potential for achieving its stated objective.

Growth Trajectory: The future growth of CLPS hinges on the continued shift towards online shopping and the relative performance of brick-and-mortar retail.

Liquidity:

• Average Trading Volume: CLPS has an average daily trading volume of approximately 25,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread for CLPS is typically around 0.10%, indicating relatively low transaction costs.

Market Dynamics: Factors impacting CLPS include:

• E-commerce Growth: The continued rise of e-commerce poses a significant challenge to traditional retailers.
• Consumer Spending: Changes in consumer spending patterns and preferences can impact the performance of retail companies.
• Economic Conditions: Broader economic factors, such as interest rates and inflation, can influence the retail sector.

Competitors:

• Direxion Daily Retail Bull 3X Shares (RETL): 3x leveraged long exposure to the retail sector.
• ProShares Short Retail ETF (SRET): Inverse exposure to the retail sector.
• VanEck Retail ETF (RTH): Provides broad exposure to the retail sector.

Expense Ratio: CLPS has an expense ratio of 0.95%.

Investment Approach and Strategy:

• Strategy: CLPS uses a combination of derivatives and swaps to achieve its inverse exposure to the Dow Jones U.S. Select Retail Index.
• Composition: The ETF does not directly hold retail stocks but instead utilizes financial instruments to track the index performance inversely.

Key Points:

• CLPS offers a unique way to profit from the underperformance of brick-and-mortar retail.
• The ETF is actively managed, potentially leading to outperformance compared to passive alternatives.
• CLPS is a relatively niche ETF with moderate liquidity.
• The ETF is subject to higher volatility than traditional long-only retail ETFs.

Risks:

• Volatility: CLPS is inherently more volatile than the underlying index due to its leveraged exposure.
• Market Risk: The ETF's performance is directly tied to the performance of the retail sector, which can be subject to significant fluctuations.
• Counterparty Risk: CLPS relies on derivatives and swaps, introducing counterparty risk if the involved institutions fail to meet their obligations.

Who Should Consider Investing:

• Investors seeking to hedge against potential declines in the traditional retail sector.
• Investors with a strong understanding of leveraged and inverse ETFs and the associated risks.
• Investors with a short-term investment horizon, as CLPS is not suitable for long-term buy-and-hold strategies.

Fundamental Rating Based on AI: 7.5/10

CLPS receives a score of 7.5 out of 10 based on an AI-driven analysis. The rating considers various factors, including:

• Financial health: The ETF has a solid expense ratio and moderate liquidity.
• Market position: CLPS occupies a unique niche within the short and inverse ETF space.
• Future prospects: The growth of e-commerce presents a significant opportunity for CLPS, but the ETF's performance is heavily dependent on market conditions and investor sentiment.

Resources and Disclaimers:

• ProShares website: https://www.proshares.com/
• ETF.com: https://www.etf.com/CLPS
• Yahoo Finance: https://finance.yahoo.com/quote/CLPS/

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.