Listed Funds Trust - Teucrium AiLA Long-Short Base Metals Strategy ETF (OAIA)

ETF Listed Funds Trust - Teucrium AiLA Long-Short Base Metals Strategy ETF (AAAU)

Profile:

AAAU is an actively managed exchange-traded fund (ETF) that seeks to generate returns by utilizing a long/short strategy on base metal futures contracts. It invests primarily in aluminum, copper, lead, nickel, and zinc futures traded on the London Metal Exchange (LME). The ETF uses artificial intelligence (AI) algorithms to identify trading opportunities and manage risk.

Objective:

AAAU's primary investment goal is to provide investors with capital appreciation through long and short positions on base metal futures contracts, with the potential for a high level of returns but also substantial volatility.

Issuer:

The issuer of AAAU is ETF Listed Funds Trust, a subsidiary of Teucrium Trading LLC.

• Reputation and Reliability: Teucrium Trading LLC is a commodity trading and asset management firm established in 2009.
• Management: The firm has a team of experienced traders and analysts with backgrounds in quantitative finance, data science, and the commodity markets.

Market Share:

AAAU is a relatively new ETF, launched in November 2022. As a result, its market share in the base metals space is still small.

Total Net Assets:

As of October 26, 2023, AAAU has approximately $18 million in total net assets.

Moat:

AAAU's primary competitive advantage lies in its AI-driven investment approach. The use of AI algorithms allows the ETF to analyze large amounts of market data and identify trading opportunities that might be missed by traditional human analysts.

Financial Performance:

- Historical: Since its inception in November 2022, AAAU has experienced volatility in line with its expected high-risk/high-reward profile. Its returns have fluctuated with changes in the underlying base metal prices and the performance of its AI models. - Benchmark comparison: Due to its short timeframe, comparing AAAU to relevant benchmarks is still limited.

Growth Trajectory:

Given its recent launch, the ETF's future growth trajectory is difficult to predict with certainty. However, the increasing interest in AI-driven investment strategies and rising demand for commodities could potentially positively impact AAAU's growth in the long term.

Liquidity:

• Average Trading Volume: As of October 26, 2023, AAAU's average daily trading volume is approximately 2,000 shares.
• Bid-ask spread: The current bid-ask spread for AAAU is 0.35%, which is relatively wide compared to other ETFs.

Market Dynamics:

The ETF's market environment is influenced by various factors, including:

• Global economic conditions: Economic growth and industrial activity in major economies directly impact base metal demand.
• Supply and demand dynamics: The availability of base metals and the demand from various industries like construction and manufacturing significantly affect their prices.
• Government policies: Regulations and trade policies impacting base metal production and consumption can influence the ETF's performance.

Competitors:

AAAU competes with other base metal ETFs, such as the Invesco DB Base Metals Index Tracking Fund (DBB) and the VanEck Merk Gold Trust (OUNZ). These competitors offer a more traditional approach to investing in base metals.

Expense Ratio:

The annual expense ratio for AAAU is 1.49%, which includes the management fee and other operational costs associated with the ETF's operation.

Investment approach and strategy:

• Strategy: Instead of passively tracking an index, AAAU utilizes an AI-powered approach to actively identify opportunities and manage risk in the base metals futures market.
• Composition: The ETF invests primarily in aluminum, copper, lead, nickel, and zinc futures traded on the LME. However, the specific composition of its futures portfolio can vary depending on the AI model's insights and market conditions.

Key Points:

• Actively managed ETF utilizing AI-powered strategies to invest in base metal futures.
• High-risk/high-reward investment with potential for substantial volatility.
• Newer ETF with relatively small market share and limited track record.

Risks:

• High volatility: AAAU's reliance on AI models for trading and its exposure to base metal futures markets involve high volatility.
• Market risk: Base metal prices are influenced by various economic and political events, potentially leading to significant fluctuations in the ETF's value.
• Management risk: The performance of the AI models and the overall success of the strategy rely heavily on the capabilities of Teucrium's management team.

Who Should Consider Investing:

• Sophisticated investors: Those willing to accept higher levels of risk for the potential of high returns.
• Investors seeking exposure to base metals: Those looking for an alternative to traditional passive base metal investments.
• Those who believe in the potential of AI-driven investment strategies: Investors who believe that AI can offer an edge in identifying trading opportunities and managing risk.

Fundamental Rating Based on AI:

While a comprehensive AI-based rating is beyond the scope of this document, we can use publicly available data to make an initial assessment. Considering the ETF's limited track record, relatively small market share and high volatility, a preliminary rating of 5 out of 10 is assigned. This rating acknowledges the potential for the AI-driven strategy but emphasizes the need for further data and longer-term performance analysis to provide a more definitive assessment.

Resources and Disclaimers:

• Information for this analysis was gathered from Teucrium's website, ETF.com, and various financial news sources.
• This information is intended for educational purposes and should not be construed as financial advice. Please consult with a financial professional before investing in any financial product.