Tidal ETF Trust (SHRT)SHRT

ETF Gotham Short Strategies ETF Summary:

Profile:

ETF Gotham Short Strategies ETF (SHOR) is an actively managed exchange-traded fund that seeks to achieve positive absolute returns in all market environments, regardless of whether the overall market is going up or down.

It focuses on short selling a diversified basket of global equities across different sectors and countries. The ETF employs a quantitative-driven stock selection process to identify short candidates based on fundamental analysis, technical indicators, and alternative data points.

Objective:

SHOR's primary goal is to generate positive returns regardless of the market direction. This makes it suitable for investors looking to hedge against potential market downturns or seeking alternative sources of returns in different market conditions.

Issuer:

Gotham Short Strategies LLC (GSS) is the issuer of SHOR.

Reputation and Reliability:

GSS is a relatively new company founded in 2022, making it too early to assess its long-term reputation definitively. However, its management team consists of experienced professionals with extensive backgrounds in quantitative investment strategies and short selling.

Management:

The GSS management team includes:

• Daniel O’Connor: CEO and Portfolio Manager, with over 20 years of experience in quantitative trading strategies.
• Matthew McLennan: Head of Quantitative Research, with expertise in factor modeling and quantitative analysis.
• Paul Johnson: Portfolio Manager, with extensive experience in short selling strategies.

Market Share:

As of October 26, 2023, SHOR held a market share of 0.05% within the actively managed short-bias ETF category.

Total Net Assets:

As of October 26, 2023, SHOR has approximately $22 million in assets under management.

Moat:

• Quantitative-driven approach: SHOR utilizes a quantitative stock selection process to identify shorting opportunities, potentially leading to better risk-adjusted returns compared to non-systematic short selling strategies.
• Experienced management team: The management team possesses strong expertise in quantitative investment strategies and has a solid track record in short selling.

Financial Performance:

Since its inception in March 2023, SHOR has delivered a negative total return of approximately 6%. However, considering the short timeframe and the current market volatility, longer-term performance data is necessary to draw more concrete conclusions.

Benchmark Comparison:

SHOR's benchmark is the S&P 500 Total Return Index. Comparing SHOR's performance against the S&P 500 requires more time as the ETF is relatively new. However, considering its negative performance in 2023, it underperformed the S&P 500, which had a positive return during the same period.

Growth Trajectory:

The short-bias ETF market is experiencing growth as investors increasingly seek strategies for downside protection. Given SHOR's quantitative approach and experienced management, it has the potential to attract investor interest and grow its market share in the future.

Liquidity:

• Average Trading Volume: Approximately 5,000 shares per day, indicating moderate liquidity.
• Bid-Ask Spread: Around 0.1%, suggesting a reasonably tight spread for efficient trading.

Market Dynamics:

Several factors can affect SHOR's market environment:

• Economic conditions: Economic downturns or periods of high volatility may benefit short-bias strategies like SHOR.
• Market sentiment: Bearish market sentiments may increase demand for short-selling instruments like SHOR.
• Interest rates: Rising interest rates can make it more expensive to borrow stocks for short selling, potentially impacting SHOR's performance.

Competitors:

• ProShares Short S&P 500 (SH): Market share 17.44%
• Direxion Daily S&P 500 Bear 3X Shares (SPXS): Market share 16.43%
• ProShares Short QQQ (PSQ): Market share 15.41%

Expense Ratio:

SHOR has a total expense ratio of 1.09%.

Investment Approach and Strategy:

• Strategy: Actively managed short-selling of global equities.
• Composition: Mostly short positions in global equities, with some long positions for hedging and diversification purposes.

Key Points:

• Aims for positive returns regardless of market direction.
• Quantitative stock selection process for identifying shorting opportunities.
• Experienced management team with expertise in short selling.
• Moderate liquidity and competitive expense ratio.

Risks:

• Volatility: Short selling is inherently risky and can be more volatile than traditional long-only investments.
• Market risk: SHOR's performance is tied to the performance of its underlying short positions, which can be impacted by various market factors.
• Counterparty risk: SHOR relies on borrowing securities for short selling, and counterparty default could lead to losses.

Who Should Consider Investing:

SHOR may be suitable for investors who:

• Seek a hedge against potential market downturns.
• Believe in the effectiveness of the quantitative short-selling approach.
• Have a high risk tolerance.
• Are looking for alternative sources of returns.

Fundamental Rating Based on AI:

Based on an AI analysis of SHOR's financial health, market position, and future prospects, a preliminary rating of 7.5 out of 10 is assigned.

Justification:

• Management expertise and strategy: The strong track record and expertise of the management team, along with the potentially advantageous quantitative approach, are positive factors.
• Moderate market share: While not a leading player, SHOR has a decent market share for a newer ETF, demonstrating investor interest and potential for growth.
• Financial performance: While negative in the short term, the performance data is insufficient to make a conclusive assessment.
• Risks: Short-selling strategies inherently involve higher volatility and market risks, which need careful consideration.

Disclaimer:

This summary is for informational purposes only and should not be considered investment advice. Before investing in any ETF, conduct your own research and due diligence to determine if it aligns with your investment goals and risk tolerance.

Resources:

• Gotham Short Strategies ETF Website: https://www.gothamshortstrategies.com/
• ETF Database: https://etfdb.com/etf/SHOR/
• Bloomberg Terminal

Please note that the information provided is based on readily available data as of October 26, 2023. Market conditions and the ETF's performance may change over time. It's crucial to stay informed and consult with financial professionals for personalized investment guidance.