Tuttle Capital Daily 2X Inverse Regional Banks ETF (SKRE)

ETF Overview: Tuttle Capital Daily 2X Inverse Regional Banks ETF (KRE)

Profile:

The Tuttle Capital Daily 2X Inverse Regional Banks ETF (KRE) is an exchange-traded fund designed to provide investors with daily leveraged, inverse exposure to the price movements of the KBW Regional Banking Index. It primarily focuses on short-term trading and aims to deliver twice the inverse performance of the index. This means when the index falls, KRE seeks to gain 2x the decline; conversely, when the index rises, KRE seeks to lose 2x the gain. KRE's assets are primarily invested in swap agreements and other fixed income instruments.

Objective:

KRE's primary investment goal is to generate returns by providing inverse exposure to the regional banking sector. It aims to benefit investors who anticipate a decline in the KBW Regional Banking Index.

Issuer:

Tuttle Capital Management LLC (TCM) is the issuer of KRE.

Reputation and Reliability:

TCM is a relatively young asset management firm founded in 2016. While it has a shorter track record than established firms, TCM has gained recognition for its innovative and risk-seeking strategies.

Management:

TCM employs a team of experienced professionals with diverse backgrounds in finance and portfolio management. The team's expertise focuses on leveraged and inverse investment strategies.

Market Share:

KRE has a relatively small market share within the leveraged and inverse ETF space. However, it holds a dominant position within the niche category of inverse regional bank ETFs.

Total Net Assets:

As of November 8th, 2023, KRE has approximately $39.5 million in total net assets.

Moat:

KRE's competitive advantage lies in its unique niche focus on leveraged and inverse exposure to regional banks. This strategy caters to a specific investor segment seeking short-term, high-risk opportunities.

Financial Performance:

KRE's historical performance reflects its leveraged and inverse nature. It has historically generated positive returns during periods of declining regional bank stock prices and negative returns during periods of rising prices. The performance is directly tied to the KBW Regional Banking Index's movement.

Benchmark Comparison:

KRE's benchmark is the KBW Regional Banking Index. The ETF generally exhibits a negative correlation with the index, aiming to deliver the inverse of its performance, multiplied by a factor of two.

Growth Trajectory:

KRE's growth trajectory is tied to the overall market sentiment towards regional banks and investor appetite for leveraged and inverse investment strategies. Given the inherent volatility of such strategies, predicting future growth is challenging.

Liquidity:

KRE's average daily trading volume is moderate, indicating sufficient liquidity for most investors. The bid-ask spread is also relatively tight, suggesting low trading costs.

Market Dynamics:

Economic indicators, interest rate movements, and regulatory changes affecting the regional banking sector significantly impact KRE's market environment. Additionally, investor sentiment and overall market volatility play a role.

Competitors:

Key competitors in the leveraged and inverse ETF space include Direxion Daily S&P 500 Bear 2x Shares (SPDN) and ProShares UltraShort QQQ (QID). However, none directly compete with KRE's specific focus on regional banks.

Expense Ratio:

KRE's expense ratio is 0.95%, which is considered average for leveraged and inverse ETFs.

Investment Approach and Strategy:

KRE uses swap agreements and other fixed income instruments to achieve its 2x inverse exposure objective. Its portfolio primarily consists of these instruments rather than directly holding underlying assets.

Key Points:

• Leveraged and inverse exposure: Delivers twice the inverse performance of the KBW Regional Banking Index.
• Short-term trading focus: Primarily designed for short-term trading strategies.
• High-risk profile: Inherently involves significant volatility and risk of loss.
• Niche market focus: Caters to investors seeking exposure to regional banks with a leveraged and inverse approach.

Risks:

• Volatility: KRE's returns can be highly volatile, potentially leading to significant losses.
• Market risk: Adverse movements in the regional banking sector can negatively impact KRE's performance.
• Counterparty risk: The ETF relies on swap agreements which carry counterparty risk.

Who Should Consider Investing:

KRE is suitable for sophisticated investors comfortable with high-risk, short-term trading strategies and seeking leveraged and inverse exposure to regional banks. It is not appropriate for long-term investors with low-risk tolerance.

Fundamental Rating Based on AI:

7/10

KRE's fundamental rating is based on an AI-driven analysis of its financial health, market position, and future prospects. While the ETF presents a unique and niche strategy, its high-risk profile and reliance on complex instruments require careful consideration.

Resources and Disclaimers:

• Data sources:
  • ETF.com
  • Yahoo Finance
  • Tuttle Capital Management LLC
• Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Investing in leveraged and inverse ETFs involves significant risks and requires careful due diligence and consultation with a qualified financial advisor.