GraniteShares 1.25x Long Tsla Daily ETF (TSL)TSL

GraniteShares 1.25x Long Tsla Daily ETF Summary

Profile:

GraniteShares 1.25x Long Tsla Daily ETF (TSLL) is an actively managed exchange-traded fund (ETF) seeking to provide leveraged exposure to the daily price movements of Tesla, Inc. common stock. It utilizes a leveraged investment approach, aiming to deliver 125% of the daily performance of Tesla, Inc. stock, both on the upside and downside. The fund focuses primarily on the technology sector and utilizes a buy-and-hold strategy with daily rebalancing.

Objectives:

TSLL's primary objective is to offer investors magnified exposure to Tesla's stock performance. This approach is suitable for investors seeking short-term, tactical exposure to Tesla's price fluctuations and potentially amplified gains. However, it also magnifies losses if the underlying asset price declines.

Issuer:

GraniteShares is the issuer of TSLL.

• Reputation and reliability: GraniteShares is a relatively new asset management firm established in 2016. While they have a limited track record compared to more established ETF providers, they have gained recognition for offering innovative and thematic ETF products.
• Management: GraniteShares' management team comprises experienced professionals with backgrounds in financial services and asset management. The team's expertise lies in identifying market trends and developing investment strategies, including leveraged and inverse ETF products.

Market Share and Assets:

• Market Share: TSLL holds a small market share within the leveraged and inverse ETF category, focusing specifically on Tesla exposure.
• Total Net Assets: As of November 10, 2023, TSLL's total net assets under management are approximately $21.46 million.

Moat:

TSLL's competitive advantages include:

• Unique Strategy: The ETF offers leveraged exposure specifically to Tesla, providing investors with a targeted way to capitalize on the company's price movements.
• Experienced Management: The management team's expertise in developing thematic and leveraged ETF products allows them to navigate market trends and adjust the ETF's strategy accordingly.

Financial Performance:

• Historical Performance: Since its inception in 2022, TSLL has delivered returns closely mirroring 125% of Tesla's daily price movements. However, due to its short history, longer-term performance data is unavailable.
• Benchmark Comparison: TSLL's performance is not directly comparable to traditional broad market indices due to its leveraged and single-stock exposure. However, it can be compared to the performance of Tesla stock multiplied by 1.25 to assess its effectiveness in achieving its stated objective.

Growth Trajectory:

The growth trajectory of TSLL is highly dependent on the future performance of Tesla stock. Considering Tesla's recent market volatility and the overall uncertainty surrounding the electric vehicle industry, predicting future growth is challenging.

Liquidity:

• Trading Volume: TSLL's average daily trading volume is approximately 24,500 shares, indicating moderate liquidity.
• Bid-Ask spread: The bid-ask spread for TSLL is relatively tight, indicating low transaction costs associated with buying and selling the ETF.

Market dynamics:

Factors impacting TSLL's market environment include:

• Tesla's financial performance: The company's earnings, product launches, and overall market share significantly affect its stock price and subsequently, TSLL's performance.
• Competition in the electric vehicle industry: Increased competition from established automakers and new entrants can impact Tesla's market dominance and influence its stock price.
• Macroeconomic factors: Interest rate hikes, inflation, and broader economic trends can influence investor sentiment towards growth stocks like Tesla, impacting its performance.

Competitors:

Key competitors in the leveraged and inverse ETF space include:

• Direxion Daily S&P 500 Bull 3X Shares (SPXL)
• ProShares UltraPro QQQ (TQQQ)
• Direxion Daily Semiconductor Bull 3X Shares (SOXL)

Expense Ratio:

TSLL's expense ratio is 0.95%, which includes management fees and other operational costs.

Investment Approach and Strategy:

• Strategy: TSLL aims to deliver leveraged daily returns on Tesla stock using a combination of swap agreements and other financial instruments. Unlike passively managed index-tracking ETFs, it actively manages its portfolio to achieve its stated objective.
• Composition: The ETF does not hold Tesla shares directly. Instead, it utilizes a swap agreement with a counterparty to gain exposure to the daily price movements of the stock.

Key Points:

• TSLL provides leveraged exposure to Tesla, amplifying gains and losses.
• The ETF is actively managed and aims to deliver 125% of Tesla's daily performance.
• Its performance is highly dependent on Tesla's stock price and the overall market conditions impacting the electric vehicle industry.
• Investors should consider their risk tolerance and investment goals before investing in TSLL.

Risks:

• Volatility: TSLL is inherently more volatile than traditional, unleveraged ETFs due to its magnified exposure to Tesla's price movements.
• Market risk: The ETF is subject to the risks associated with the technology sector, specifically the electric vehicle market, and Tesla's stock price fluctuations.
• Counterparty risk: The ETF relies on a swap agreement with a counterparty to achieve its investment objective. Any default or inability of the counterparty to fulfill its obligations could negatively impact the ETF's performance.

Who Should Invest?:

TSLL is suitable for short-term, tactical investors with high-risk tolerance seeking amplified exposure to Tesla's stock price movements. It aligns with investors who have a bullish outlook on Tesla and believe in its future growth prospects. However, due to its volatility and magnified risk profile, it may not be appropriate for all investors, especially those with a long-term investment horizon or a lower risk tolerance.

Fundamental Rating Based on AI:

Based on an AI analysis, TSLL receives a fundamental rating of 6.5 out of 10. This rating considers various factors including the ETF's financial performance, market share, liquidity, expense ratio, management team, and future growth prospects. While TSLL offers a unique strategy for investors seeking leveraged exposure to Tesla, its short history, limited market share, and inherent volatility are key considerations impacting its overall score.

Resources and Disclaimers:

This summary utilizes publicly available information from the following sources:

• GraniteShares website: https://graniteshares.com/
• Yahoo Finance: https://finance.yahoo.com/
• ETF Database: https://etfdb.com/
• SEC filings

This information is intended for educational purposes and should not be construed as investment advice. Investing in any financial instrument involves inherent risks, and investors should carefully consider their risk tolerance and investment objectives before making any decisions.