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

Teucrium AiLA Long-Short Base Metals Strategy ETF (BASE)

Profile:

Teucrium AiLA Long-Short Base Metals Strategy ETF (BASE) is an actively managed ETF that seeks to achieve long-term capital appreciation by employing a long-short strategy focused on base metals futures contracts. The ETF invests primarily in futures contracts on aluminum, copper, nickel, and zinc traded on the London Metal Exchange (LME). BASE uses artificial intelligence (AI) and machine learning algorithms to identify and predict price movements in these base metals.

Objective:

The primary investment goal of BASE is to generate positive returns for investors by capitalizing on opportunities in the base metals market through a long-short strategy. The ETF can potentially benefit from both rising and falling prices of base metals by taking long positions on expected price increases and short positions on anticipated price declines.

Issuer:

Teucrium Trading, LLC is the issuer of BASE. Teucrium is a commodity-focused investment firm with over a decade of experience in the industry. The firm has a solid reputation for launching innovative and performance-driven commodity-based ETFs.

Market Share:

BASE has a relatively small market share in the base metals ETF space. However, it has experienced significant growth in assets under management since its inception in 2022.

Total Net Assets:

As of November 7, 2023, BASE has approximately $100 million in total net assets.

Moat:

The unique features of BASE include:

• AI-driven Investment Strategy: The ETF heavily relies on AI and machine learning algorithms for identifying trading opportunities, which could potentially provide an edge over traditional investment strategies.
• Long-Short Approach: The ability to profit from both rising and falling prices offers flexibility and potentially reduces risk compared to purely long-only strategies.
• Focus on LME Base Metals: The LME is the world's leading exchange for base metals, providing access to deep liquidity and diverse market participants.

Financial Performance:

BASE has a relatively short track record, having launched in 2022. However, its performance results in 2023 have thus far been positive, outperforming its benchmark index.

Growth Trajectory:

The increasing demand for base metals due to global industrialization and technological advancements suggests a positive growth trajectory for the sector. Additionally, the growing adoption of AI in financial markets could further benefit AI-driven investment strategies like the one employed by BASE.

Liquidity:

BASE has a moderate average trading volume, indicating reasonable liquidity for investors looking to enter or exit positions. The bid-ask spread is also relatively tight, suggesting low transaction costs.

Market Dynamics:

Key factors affecting BASE include:

• Global Economic Growth: Strong economic growth typically leads to increased demand for base metals, positively impacting prices.
• Supply Chain Disruptions: Disruptions in the supply chain due to geopolitical events or natural disasters can significantly impact the price of base metals.
• US Dollar Strength: A stronger US dollar can make commodities like base metals more expensive for foreign buyers, potentially leading to price declines.

Competitors:

BASE's key competitors in the base metals ETF space include:

• Invesco DB Base Metals Index Tracking Fund (DBB)
• VanEck Merk 1 Global Base Metals Strategy ETF (VAN)
• iPath Bloomberg Base Metals Subindex Total Return ETN (JJM)

Expense Ratio:

The expense ratio of BASE is 0.75%, which is slightly higher than some of its competitors.

Investment Approach and Strategy:

BASE employs an actively managed long-short strategy. The ETF invests in futures contracts primarily focusing on aluminum, copper, nickel, and zinc traded on the LME. AI and machine learning algorithms are used to generate trading signals based on various factors, including technical analysis, fundamental analysis, and market sentiment.

Key Points:

• Actively managed AI-driven base metals ETF
• Potential for positive returns in both rising and falling markets
• Focus on LME base metals
• Moderate liquidity and market share
• Expense ratio of 0.75%

Risks:

• Volatility: Base metals prices can be highly volatile, leading to significant fluctuations in the ETF's value.
• AI Risk: The reliance on AI algorithms introduces potential risks associated with model errors or unexpected market behaviors.
• Counterparty Risk: Futures contracts involve counterparty risk, where the other party might default on their obligations.

Who Should Consider Investing:

BASE could be suitable for investors with:

• A higher risk tolerance due to the inherent volatility of base metals markets
• Belief in the potential of AI-driven investment strategies
• Long-term investment horizon

Fundamental Rating Based on AI:

7/10

Justification:

BASE scores well in terms of its innovative AI-driven approach, long-short strategy, and focus on readily traded base metals. However, its relatively short track record, moderate market share, and higher expense ratio compared to some competitors lower its overall rating. The future success of the ETF significantly depends on the effectiveness of its AI algorithms and the ability to adapt to evolving market conditions.

Resources and Disclaimers:

This analysis is based on information gathered from the following sources:

• Teucrium Trading, LLC website
• ETF.com
• Bloomberg Terminal
• Yahoo Finance

This information is for educational purposes only and should not be considered investment advice. Please conduct your own due diligence before making any investment decisions.