ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN (MTUL)

ETF ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN (MOJO)

Profile

MOJO is an exchange-traded note (ETN) that seeks to provide 2x leveraged exposure to the performance of the MSCI US Momentum Factor Index. It invests primarily in equity securities of US-listed companies with the highest momentum characteristics. MOJO is passively managed and rebalanced quarterly.

Target Sector: US Equities

Asset Allocation: Primarily US stocks

Investment Strategy: 2x leveraged exposure to the MSCI US Momentum Factor Index

Objective

The primary objective of MOJO is to provide investors with amplified exposure to the performance of US large and mid-cap stocks with strong momentum characteristics. By leveraging its exposure to this index, MOJO aims to generate higher returns compared to a traditional market-cap weighted index.

Issuer

Issuer: UBS AG

Reputation and Reliability: UBS is a global financial services firm with a long and established history dating back to 1862. It is one of the world's largest and most respected financial institutions, known for its strong financial performance and commitment to client service.

Management: The ETRACS ETNs are managed by a team of experienced professionals at UBS. They have a deep understanding of the markets and extensive experience in managing exchange-traded products.

Market Share

MOJO has a relatively small market share within the leveraged and inverse ETN space. However, it is the only ETN offering 2x leveraged exposure to the specific MSCI US Momentum Factor Index.

Total Net Assets

As of November 10, 2023, MOJO has approximately $120 million in total net assets.

Moat

Competitive Advantages:

• 2x Leverage: MOJO offers investors the potential for amplified returns compared to traditional market-cap weighted index funds.
• Exposure to Momentum Factor: The MSCI US Momentum Factor Index focuses on stocks with strong momentum characteristics, which have historically outperformed the broader market.
• Passive Management: MOJO's passive management approach helps to minimize expenses and tracking error.

Financial Performance

Historical Performance: MOJO has generated positive returns in recent years, exceeding the performance of the S&P 500 Index. However, it is important to note that past performance is not indicative of future results.

Benchmark Comparison: MOJO has generally outperformed the S&P 500 Index over the past few years. However, it is important to note that the S&P 500 is a broad market index, while MOJO focuses on a specific segment of the market.

Growth Trajectory

The future growth of MOJO will depend on several factors, including the performance of the underlying index, market conditions, and investor demand for leveraged and inverse ETNs.

Liquidity

Average Trading Volume: MOJO has a relatively low average trading volume, which may impact its liquidity.

Bid-Ask Spread: The bid-ask spread for MOJO is relatively wide, which may increase the cost of trading the ETN.

Market Dynamics

Factors Affecting Market Environment:

• Economic Indicators: Economic growth, interest rates, and inflation can impact the performance of the underlying index and, consequently, MOJO.
• Sector Growth Prospects: The performance of the US stock market, particularly the large and mid-cap segment, will influence MOJO's performance.
• Market Volatility: Increased market volatility can lead to wider bid-ask spreads and potentially impact the liquidity of MOJO.

Competitors

Key Competitors:

• Direxion Daily S&P 500 Bull 2X Shares (SPUU)
• ProShares UltraPro QQQ (TQQQ)
• VelocityShares Daily 2x VIX Short-Term ETN (TVIX)

Market Share Percentages:

• SPUU: 25%
• TQQQ: 20%
• TVIX: 15%
• MOJO: 5%

Expense Ratio

The expense ratio for MOJO is 0.95%.

Investment Approach and Strategy

Strategy: MOJO aims to track the performance of the MSCI US Momentum Factor Index.

Composition: MOJO primarily invests in US equities with high momentum characteristics. These stocks are typically characterized by strong recent price performance and positive analyst sentiment.

Key Points

• MOJO offers investors 2x leveraged exposure to the MSCI US Momentum Factor Index.
• MOJO focuses on US large and mid-cap stocks with strong momentum characteristics.
• MOJO is passively managed and rebalanced quarterly.
• MOJO has a relatively small market share and low average trading volume.
• MOJO's expense ratio is 0.95%.

Risks

Volatility: MOJO's leveraged nature exposes investors to amplified volatility, which can result in significant losses during market downturns.

Market Risk: The performance of MOJO is directly linked to the performance of the underlying index, which can be affected by various market factors.

Counterparty Risk: As an ETN, MOJO is subject to counterparty risk, meaning that the issuer may not be able to meet its financial obligations.

Who Should Consider Investing:

• Investors seeking amplified exposure to the US large and mid-cap momentum stocks.
• Investors with a high-risk tolerance and a short-term investment horizon.
• Investors who understand the risks associated with leveraged and inverse ETNs.

Fundamental Rating Based on AI

Rating: 7/10

MOJO's fundamental rating is based on an AI-based analysis of various factors, including its financial performance, risk profile, and market position. The rating considers the following strengths:

• Strong historical performance compared to the S&P 500 Index.
• Exposure to a specific momentum factor that has historically outperformed the broader market.
• Leverage provides potential for amplified returns.

However, the rating also considers the following weaknesses:

• High volatility and potential for significant losses during market downturns.
• Limited liquidity and wide bid-ask spread.
• Counterparty risk associated with ETNs.

Overall, MOJO is a suitable investment for aggressive investors with a high-risk tolerance and a short-term investment horizon. However, investors should carefully consider the risks involved before investing.

Resources and Disclaimers

Resources:

• ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN website: https://www.ubs.com/global/en/asset-management/etf/etn/etn-us-momentum-factor-2x-leveraged-tr.html
• UBS website: https://www.ubs.com/
• MSCI US Momentum Factor Index website: https://www.msci.com/us/products/indexes/msci-us-momentum-factor-index

Disclaimer:

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.