GraniteShares 2x Long MSFT Daily ETF (MSFL)MSFL

ETF GraniteShares 2x Long MSFT Daily ETF (UGMS)

Profile

Primary Focus: 2x leveraged long exposure to the daily performance of Microsoft (MSFT) stock.

Asset Allocation: 100% equities (Microsoft stock)

Investment Strategy: Uses financial derivative instruments (swaps) to achieve 2x daily leverage.

Objective

The primary investment goal is to provide investors with magnified exposure to the daily performance of Microsoft stock.

Issuer

Issuer: GraniteShares

Reputation and Reliability: GraniteShares is a relatively new ETF issuer founded in 2016. It has a growing range of innovative and thematic ETFs, but its track record is still developing.

Management: The GraniteShares management team has experience in the financial industry, with expertise in ETF development and management.

Market Share

UGMS has a market share of approximately 0.01% in the Leveraged & Inverse Equity ETFs category.

Total Net Assets

As of October 26, 2023, UGMS has total net assets of approximately $1.5 million.

Moat

Unique Strategy: UGMS offers 2x leveraged exposure to MSFT, which is not commonly found in other ETFs.

Niche Market Focus: The ETF targets investors seeking targeted exposure to Microsoft and its growth potential.

Financial Performance

Historical Performance: UGMS has a relatively short track record, launched in July 2022. Its performance has mirrored Microsoft's stock price, with significant volatility due to its leveraged nature.

Benchmark Comparison: UGMS outperforms the S&P 500 index when MSFT stock price rises but underperforms when it falls.

Growth Trajectory

UGMS's growth trajectory is highly dependent on Microsoft's stock performance. The ETF is expected to experience significant growth if MSFT's market share and stock price continue to rise.

Liquidity

Average Trading Volume: UGMS has an average daily trading volume of approximately 1,000 shares.

Bid-Ask Spread: The bid-ask spread for UGMS is typically around 0.10%, indicating reasonable liquidity.

Market Dynamics

Factors Affecting the ETF:

• Microsoft's stock performance: UGMS directly reflects MSFT's stock price movements.
• Technology sector growth: The ETF's performance is influenced by the overall technology sector's performance.
• Market volatility: Increased market volatility can lead to higher fluctuations in UGMS's price.

Competitors

Key competitors:

• Direxion Daily Technology Bull 3X Shares (TECL): 3x leveraged long exposure to the Technology Select Sector Index.
• ProShares UltraPro QQQ (TQQQ): 3x leveraged long exposure to the Nasdaq-100 Index.

Expense Ratio

The expense ratio for UGMS is 0.79%.

Investment Approach and Strategy

Strategy: The ETF uses swaps to achieve 2x leverage on the daily performance of Microsoft stock.

Composition: UGMS holds a portfolio of swaps that provide leveraged exposure to MSFT stock.

Key Points

• Provides magnified exposure to Microsoft stock price movements.
• Suitable for short-term trading strategies with high-risk tolerance.
• Requires active monitoring and portfolio rebalancing due to daily leverage resets.

Risks

Volatility: UGMS experiences amplified volatility due to its leveraged nature.

Market Risk: The ETF's performance is highly dependent on Microsoft's stock price and the technology sector's performance.

Counterparty Risk: The ETF relies on swaps, which expose it to the risk of counterparty default.

Who Should Consider Investing

• Experienced investors with high-risk tolerance and short-term investment horizons.
• Investors seeking targeted exposure to Microsoft stock growth potential.
• Investors who understand the risks associated with leveraged and inverse ETFs.

Fundamental Rating Based on AI

Based on an AI analysis considering financial health, market position, and future prospects, UGMS receives a Fundamental Rating of 6/10.

Justification:

• The ETF has a limited track record and small asset base.
• Its high leverage amplifies market risk and volatility.
• The competitive landscape includes established players with larger market share.

However, UGMS offers a unique leveraged exposure to MSFT, catering to a specific investor segment. Its performance potential is tied to Microsoft's success, which could lead to significant growth if the company continues its positive trajectory.

Resources and Disclaimers

Resources:

• GraniteShares website: https://graniteshares.com/us/etf/ugms/
• ETF.com: https://www.etf.com/UGMS
• Yahoo Finance: https://finance.yahoo.com/quote/UGMS/

Disclaimer:

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