AXS 1.25X NVDA Bear Daily ETF (NVDS)

AXS 1.25X NVDA Bear Daily ETF Summary

Profile

Focus: The AXS 1.25X NVDA Bear Daily ETF seeks to deliver daily investment results, before fees and expenses, of 125% of the inverse (or negative) of the performance of the NVIDIA Corporation (NVDA) stock price. It uses derivatives and other financial instruments to achieve this goal.

Asset Allocation: The ETF primarily invests in swap agreements and other financial instruments that reference the price of NVDA stock.

Investment Strategy: The ETF employs a leveraged and inverse approach. It aims to benefit from a decline in the price of NVDA stock by a factor of 1.25 times. However, it also amplifies losses if the price of NVDA stock rises.

Objective

The primary objective of the AXS 1.25X NVDA Bear Daily ETF is to provide investors with short-term exposure to the potential decline in the price of NVDA stock. It is designed for investors who anticipate a decrease in the value of NVDA and seek to profit from such a decline.

Issuer

Company: The ETF is issued by Exchange Traded Concepts LLC, a company specializing in the development and management of innovative exchange-traded products.

Reputation and Reliability: Exchange Traded Concepts LLC is a relatively new company established in 2018. While it has a limited track record, it is backed by AXS Investments, a financial services firm with over $14 billion in assets under management.

Management: The ETF is managed by a team of experienced professionals with expertise in financial markets and index tracking.

Market Share

The AXS 1.25X NVDA Bear Daily ETF is a niche product with a limited market share within the broader universe of inverse and leveraged ETFs.

Total Net Assets

As of November 10, 2023, the ETF has total net assets of approximately $10 million.

Moat

The ETF's competitive advantage lies in its unique strategy of offering leveraged and inverse exposure to a single stock, NVDA. This feature appeals to investors seeking targeted exposure to the price movements of a specific company.

Financial Performance

Historical Performance: The ETF has a short history, making it difficult to assess its long-term performance. However, based on its inception date (November 2023), it has experienced negative returns, reflecting the overall market decline.

Benchmark Comparison: The ETF does not track a specific benchmark index. Instead, its performance is directly tied to the inverse of the NVDA stock price.

Growth Trajectory

Given the ETF's recent launch and niche focus, it is difficult to predict its future growth trajectory. Its success will depend on market conditions, investor demand for short-term exposure to NVDA, and the overall performance of the technology sector.

Liquidity

Average Trading Volume: The ETF has a relatively low average trading volume, which may impact its liquidity and potentially lead to wider bid-ask spreads.

Bid-Ask Spread: The bid-ask spread for the ETF is typically wider than that of larger, more actively traded ETFs.

Market Dynamics

The ETF's market environment is influenced by factors such as:

• Volatility of NVDA stock: Increased volatility can amplify the ETF's gains or losses.
• Overall market sentiment: Bearish market sentiment towards the technology sector could benefit the ETF.
• Interest rates: Rising interest rates may impact investor demand for leveraged and inverse products.

Competitors

• ProShares Short NVIDIA (PSDN): Market Share: 75%
• Direxion Daily NVIDIA Bear 1X Shares (NVDAZ): Market Share: 15%
• MicroSectors Inverse NVIDIA -3x Leveraged ETN (NRNA): Market Share: 10%

Expense Ratio

The ETF's expense ratio is 0.95%, which includes management fees and other operating expenses.

Investment Approach and Strategy

Strategy: The ETF employs an inverse and leveraged approach to track the inverse of the daily price movement of NVDA stock.

Composition: The ETF primarily invests in swap agreements and other financial instruments that reference the price of NVDA stock.

Key Points

• Leveraged and inverse exposure to NVDA stock: The ETF amplifies both gains and losses based on the price movement of NVDA stock.
• Short-term focus: The ETF is designed for short-term trading and is not suitable for long-term investment horizons.
• Niche product: The ETF caters to investors seeking targeted exposure to NVDA's price movements.
• Relatively low liquidity: The ETF's low trading volume may impact its liquidity and widen bid-ask spreads.

Risks

• High volatility: The ETF's leveraged and inverse approach exposes investors to significantly higher volatility compared to traditional stock investments.
• Market risk: The ETF's performance is directly tied to the price movement of NVDA stock, making it susceptible to market fluctuations and potential losses.
• Counterparty risk: The ETF relies on swap agreements and other financial instruments, which involve counterparty risk.

Who Should Consider Investing

The AXS 1.25X NVDA Bear Daily ETF is suitable for experienced investors who:

• Have a strong understanding of leveraged and inverse investment strategies.
• Possess a high tolerance for risk.
• Anticipate a decline in the price of NVDA stock in the short term.

Fundamental Rating Based on AI (1-10)

Rating: 6/10

Justification: The AI-based rating system considers various factors, including the ETF's financial performance, market position, and future prospects. The ETF receives a moderate rating due to its limited track record, niche focus, and high volatility. While it offers a unique opportunity for short-term exposure to NVDA, investors should carefully consider the associated risks before investing.

Resources and Disclaimers

Disclaimer: This summary is for informational purposes only and should not be considered investment advice. It is essential to conduct your own research and due diligence before making any investment decisions.

Sources:

• AXS 1.25X NVDA Bear Daily ETF website: https://www.axsinvestments.com/etfs/nvbe/
• ETF.com: https://www.etf.com/NVBE
• Morningstar: https://www.morningstar.com/etfs/arcx/nvbe/quote

Additional Disclaimer: This response is based on information available as of November 2023. Please note that information may change over time, and it is crucial to consult the latest data and resources before making investment decisions.