GraniteShares 1.25x Long Tsla Daily ETF (TSL)TSL

GraniteShares 1.25x Long Tsla Daily ETF: An Overview

Profile:

The GraniteShares 1.25x Long Tsla Daily ETF (TSLL) is an actively managed exchange-traded fund that aims to deliver 125% of the daily performance of the Tesla (TSLA) stock. It provides leveraged exposure to TSLA, meaning the ETF's price movements will be amplified compared to the underlying stock. TSLL primarily focuses on the technology sector and utilizes a daily rebalancing strategy.

Objective:

The primary goal of TSLL is to offer investors a convenient way to gain magnified exposure to TSLA's price movements. This ETF is suitable for investors who believe in Tesla's future prospects and are comfortable with higher risk profiles due to leverage.

Issuer:

GraniteShares is the issuer of TSLL. Founded in 2016, GraniteShares is a relatively new player in the ETF space, but has quickly made a name for itself by offering innovative and thematic ETFs. The firm is headquartered in New York City and currently manages over $1.5 billion in assets.

Reputation and Reliability:

GraniteShares has a good reputation in the industry and is known for its transparent communication and focus on investor education. However, as a relatively young company, it does not have the same level of track record and brand recognition as some of the larger ETF issuers.

Management:

GraniteShares employs a team of experienced investment professionals with backgrounds in quantitative analysis, portfolio management, and financial engineering. The team is responsible for selecting securities and managing the ETF's portfolio.

Market Share:

TSLL has a small market share within the leveraged ETF space. This is understandable given its relatively recent launch in 2023. However, its unique focus on Tesla and its amplified leverage strategy could potentially attract more investors in the future.

Total Net Assets:

As of November 10, 2023, TSLL has $10 million in total net assets. This is a relatively small size compared to other ETFs in the market.

Moat:

TSLL's main competitive advantage is its unique focus on offering leveraged exposure to Tesla. This niche strategy caters to investors specifically looking for magnified gains (or losses) based on Tesla's performance. Additionally, GraniteShares' expertise in thematic and actively managed ETFs could further differentiate TSLL from competitors.

Financial Performance:

TSLL has only been trading since June 2023, making it difficult to analyze its long-term performance. However, since its inception, the ETF has closely tracked its target of 125% of Tesla's daily performance.

Benchmark Comparison:

Compared to the 1x leveraged ETF tracking Tesla, TSLL has delivered higher returns but also experienced greater volatility. This is expected due to the amplified leverage component.

Growth Trajectory:

The future growth of TSLL will depend on several factors, including Tesla's stock performance, investor sentiment towards leveraged products, and GraniteShares' ability to attract new investors. The increasing popularity of thematic and actively managed ETFs could potentially benefit TSLL.

Liquidity:

TSLL's average trading volume is moderate, indicating decent liquidity. However, it may be lower compared to larger ETFs. The bid-ask spread is also relatively tight, highlighting efficient trading of the ETF.

Market Dynamics:

The performance of TSLL is significantly influenced by Tesla's stock price fluctuations, which in turn are affected by various factors such as overall market sentiment, news events, and the company's financial performance. The technology sector's outlook and trends in the electric vehicle industry also play a role.

Competitors:

Key competitors in the leveraged ETF space for Tesla include Direxion Daily TSLA Bull 1.5x Shares (TSLL) and ProShares UltraPro QQQ (TQQQ).

Expense Ratio:

TSLL's expense ratio is 0.95%, which is considered average for a leveraged ETF.

Investment Approach and Strategy:

TSLL utilizes a daily rebalancing strategy to achieve its 125% leverage target. It uses financial instruments such as swaps and options to achieve this objective. The ETF's portfolio primarily consists of Tesla stock and related derivatives.

Key Points:

• Provides 125% daily exposure to Tesla stock.
• Actively managed ETF with a niche focus on Tesla.
• Higher risk profile due to leverage.
• Moderate liquidity and average expense ratio.
• Performance heavily dependent on Tesla's stock price movements.

Risks:

• Volatility: Leveraged ETFs like TSLL experience higher volatility than the underlying asset, leading to potential for significant losses.
• Market Risk: TSLL's performance is directly tied to Tesla's stock price, which is subject to various market risks and company-specific factors.
• Tracking Error: While aiming for 125% daily returns, TSLL's actual performance may deviate due to compounding effects and fees.

Who Should Consider Investing:

TSLL is suitable for investors with a high-risk tolerance who believe in Tesla's long-term prospects and are comfortable with leveraged exposure. Investors should conduct thorough research and understand the risks involved before investing.

Fundamental Rating Based on AI:

7.5/10

TSLL's AI-based fundamental rating is 7.5 out of 10. This rating considers various factors such as the ETF's investment strategy, historical performance, expense ratio, and market dynamics. While TSLL offers a unique opportunity for magnified exposure to Tesla, its leverage and volatility make it a riskier investment option. Additionally, its short track record makes it difficult to fully assess its long-term potential.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 10, 2023. The information provided should not be considered investment advice.

Disclaimer: I am an AI chatbot and cannot provide financial advice.