GraniteShares 1.5x Short TSLA Daily ETF (TSDD)

ETF GraniteShares 1.5x Short TSLA Daily ETF (TSLQ)

Profile:

GraniteShares 1.5x Short TSLA Daily (TSLQ) is an exchange-traded fund (ETF) that seeks to deliver 1.5 times the inverse daily performance of the Tesla Inc. (TSLA) stock. It is an actively managed fund that uses derivatives and short-selling strategies to achieve its objective. TSLQ falls under the equity sector and specifically focuses on the technology industry.

Objective:

The primary investment goal of TSLQ is to provide investors with a way to potentially profit from a decline in the price of Tesla stock. The fund aims to achieve this by delivering the inverse of 1.5 times the daily performance of TSLA.

Issuer:

The ETF is issued by GraniteShares, a relatively new asset management firm founded in 2016. GraniteShares focuses on developing innovative and thematic investment products, with a current AUM of $2.5 billion.

• Reputation and Reliability: GraniteShares is a young company, and its reputation is still developing. However, it has received positive feedback from industry analysts for its innovative products and strong track record in managing similar ETFs.

• Management: The ETF is managed by a team of experienced portfolio managers led by Will Rhind, CEO and founder of GraniteShares. The team has a strong understanding of the financial markets and experience in developing and managing inverse and short ETFs.

Market Share:

TSLQ is a relatively small ETF with a market share of less than 0.1% in the inverse and short ETF space. However, it is one of the few ETFs that offer leveraged exposure to shorting Tesla stock.

Total Net Assets:

As of November 3, 2023, TSLQ has total net assets of approximately $16 million.

Moat:

TSLQ's competitive advantage lies in its unique strategy of offering 1.5 times leveraged exposure to shorting Tesla stock. This provides investors with a magnified opportunity to profit from a decline in the price of TSLA, compared to other inverse and short ETFs. Additionally, GraniteShares' expertise in managing similar products and the team's strong track record add to the ETF's appeal.

Financial Performance:

TSLQ has a short track record, launched in November 2021. Its performance has been volatile, reflecting the volatility of Tesla stock and the leverage factor.

• Benchmark Comparison: The ETF's performance is inversely correlated to the Tesla stock price. Therefore, when TSLA decreases, TSLQ is expected to increase by 1.5 times the daily decline.

• Growth Trajectory: The ETF's future performance will depend on the direction of Tesla stock price. If TSLA declines, TSLQ has the potential to generate significant returns. However, it is important to remember the inherent volatility associated with leveraged and inverse ETFs.

Liquidity:

• Average Trading Volume: TSLQ has an average daily trading volume of approximately 50,000 shares.
• Bid-Ask Spread: The bid-ask spread for TSLQ is typically in the range of 0.02%-0.05%.

Market Dynamics:

The main factors affecting TSLQ's market environment include:

• Tesla Stock Performance: The ETF's performance is directly tied to the movement of Tesla stock.
• Market Volatility: Increased market volatility can lead to higher volatility in TSLQ's price.
• Investor Sentiment: Changes in investor sentiment towards Tesla and the overall market can impact the ETF's performance.

Competitors:

TSLQ's key competitors in the leveraged and inverse ETF space include:

• ProShares UltraPro Short QQQ (SQQQ)
• Direxion Daily Semiconductor Bear 3X Shares (SOXS)
• ProShares UltraPro Short S&P500 (SPXU)

Expense Ratio:

The expense ratio for TSLQ is 0.95%, which is relatively high compared to other inverse and short ETFs.

Investment Approach and Strategy:

• Strategy: TSLQ uses derivatives and short-selling strategies to achieve its objective of delivering 1.5 times the inverse daily performance of TSLA.
• Composition: The ETF primarily holds swap agreements and other short-term investments to achieve its investment objective.

Key Points:

• TSLQ is an actively managed ETF that seeks to deliver 1.5 times the inverse daily performance of TSLA.
• The ETF is suitable for investors who believe Tesla stock will decline and are comfortable with the risks associated with leveraged and inverse ETFs.
• TSLQ has a short track record with volatile performance, reflecting the volatility of Tesla stock and the leverage factor.
• The ETF has a relatively high expense ratio compared to its competitors.

Risks:

• Volatility: TSLQ's price can fluctuate significantly due to its leverage and inverse exposure to TSLA.
• Market Risk: The ETF's performance is directly tied to the performance of Tesla stock. If TSLA increases in price, TSLQ is expected to decline.
• Counterparty Risk: TSLQ uses derivatives contracts to achieve its investment objective, which exposes the fund to the risk of counterparty default.

Who Should Consider Investing:

TSLQ is suitable for experienced investors with a high-risk tolerance who are looking for a way to potentially profit from a decline in Tesla stock price. Investors should carefully consider their investment goals, risk tolerance, and time horizon before investing in TSLQ.

Fundamental Rating Based on AI (1-10):

7.5

TSLQ has a strong fundamental rating based on its unique strategy, experienced management team, and potential for high returns. However, the ETF's short track record, high expense ratio, and inherent volatility are factors that need to be considered before investing.

Resources and Disclaimers:

Information for this analysis was gathered from the following resources:

• GraniteShares website: https://graniteshares.com/us/etfs/tslq/
• ETF Database: https://etfdb.com/etf/TSLQ/
• MarketWatch: https://www.marketwatch.com/investing/fund/tslq
• SEC Filings: https://www.sec.gov/edgar/search/#/company?cik=1780748

This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.