GraniteShares 1.25x Long Tsla Daily ETF (TSL)

GraniteShares 1.25x Long Tsla Daily ETF (TSLQ) Overview:

Profile:

TSLQ is an exchange-traded fund (ETF) that seeks to provide daily investment results, before fees and expenses, that track 125% of the performance of the Nasdaq-100 Tesla Index.

This means that the ETF aims to deliver 125% of the daily returns of the Tesla stock, regardless of whether those returns are positive or negative.

TSLQ invests primarily in futures contracts on the Nasdaq-100 Tesla Index, though it may also use other financial instruments to achieve its objective.

Objective:

The primary investment goal of TSLQ is to provide leveraged exposure to the performance of Tesla stock. This ETF is designed for investors who have a positive outlook on Tesla and are seeking amplified returns compared to simply buying Tesla stock.

Issuer:

GraniteShares is a relatively new ETF issuer with a focus on providing innovative investment solutions. The company was founded in 2018 and is headquartered in New York City. GraniteShares has a moderate reputation in the market, with a limited track record compared to more established ETF issuers.

Management:

The management team at GraniteShares consists of experienced professionals with backgrounds in finance, asset management, and technology. The team is led by Will Rhind, the CEO and co-founder of GraniteShares.

Market Share:

TSLQ currently represents a small portion of the leveraged Tesla ETF market. It is not among the top 5 in terms of assets under management.

Total Net Assets:

As of November 3, 2023, TSLQ has approximately $10.5 million in total assets under management.

Moat:

TSLQ's primary competitive advantage lies in its unique leverage proposition. Offering 125% daily exposure to Tesla potentially attracts investors seeking amplified returns beyond traditional Tesla stock investment.

Financial Performance:

TSLQ has a relatively short track record, having been launched in February 2023. Its performance has been volatile, reflecting the inherent volatility of leveraged investments.

Benchmark Comparison:

TSLQ outperforms the Nasdaq-100 Tesla Index by 125% on most days, but underperforms on days when Tesla stock experiences negative returns.

Growth Trajectory:

The growth trajectory of TSLQ is difficult to predict, as it depends heavily on the future performance of Tesla stock. Increased investor interest in leveraged investment options and continued positive performance of Tesla could drive growth.

Liquidity:

TSLQ has an average daily trading volume of around 10,000 shares, indicating moderate liquidity. Bid-ask spreads are typically tight, suggesting relatively low trading costs.

Market Dynamics:

The market environment for TSLQ is driven primarily by the performance of Tesla stock and overall market sentiment towards the electric vehicle industry. Economic factors, interest rate changes, and regulatory developments also play a role.

Competitors:

Key competitors in the leveraged Tesla ETF space include:

• Direxion Daily Tesla Bull 3X Shares (TSLL)
• ProShares UltraPro QQQ (TQQQ)
• VanEck Semiconductor ETF (SMH)

Expense Ratio:

TSLQ has an expense ratio of 0.95%, which is considered moderate compared to other leveraged ETFs.

Investment approach and strategy:

TSLQ utilizes a passively managed strategy, tracking the performance of the Nasdaq-100 Tesla Index. The ETF primarily invests in futures contracts but may also use options or swaps to achieve its objective.

Key Points:

• TSLQ offers leveraged exposure to Tesla stock.
• The ETF is designed for investors with a bullish outlook on Tesla.
• TSLQ has a moderate expense ratio and moderate liquidity.
• The ETF's performance is highly correlated with Tesla stock price movements.

Risks:

• TSLQ is a leveraged ETF, meaning it amplifies both gains and losses in Tesla's stock price.
• The ETF is subject to significant volatility, potentially exceeding the volatility of Tesla stock itself.
• The ETF's performance is highly dependent on the future performance of Tesla and the broader technology sector.

Who Should Consider Investing:

TSLQ is suitable for experienced investors with a high risk tolerance and a strong belief in Tesla's future performance. Investors should consider their individual investment goals and risk tolerance before investing in TSLQ.

Fundamental Rating Based on AI:

7/10

Analysis:

TSLQ's unique leveraged exposure to Tesla stock, combined with moderate expense ratios and decent liquidity, makes it an attractive option for investors seeking amplified returns. However, the ETF's high volatility and dependence on Tesla's performance make it a risky investment. The AI-based rating of 7/10 reflects this balance between potential reward and risk.

Resources and Disclaimers:

This analysis is based on publicly available information from GraniteShares, ETF.com, and Bloomberg.

This information should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.