T-Rex 2X Inverse Tesla Daily Target ETF (TSLZ)

ETF T-Rex 2X Inverse Tesla Daily Target ETF Analysis:

Profile:

Overview: The ETF T-Rex 2X Inverse Tesla Daily Target ETF (TSLA2) is an exchange-traded fund designed to deliver the inverse of twice the daily performance of the Tesla Inc. stock price. It aims to achieve this by using financial instruments like swap agreements and futures contracts. TSLA2 caters to short-term investors with a bearish outlook on Tesla's stock price.

Target Sector: Equity - Technology (specifically Tesla Inc.)

Asset Allocation: 100% exposure to financial instruments inversely correlated to Tesla stock.

Investment Strategy: Inverse, meaning it aims to profit from declines in Tesla's stock price.

Objective: To generate returns mirroring the opposite of twice the daily performance of the Tesla stock price.

Issuer:

Company: GraniteShares

Reputation & Reliability: GraniteShares is a relatively young, independent ETF issuer established in 2018. It's known for its innovative and thematic ETF offerings.

Management: While GraniteShares has a smaller team compared to established names, it comprises experienced financial professionals with expertise in quantitative modeling and portfolio construction.

Market Share: TSLA2 is one of the newer entrants in the inverse Tesla ETF space. It currently holds a minimal market share in the technology sector.

Total Net Assets: Approximately $44 million as of October 27, 2023.

Moat:

Unique Strategy: TSLA2 offers twice the inverse exposure compared to most competitors, targeting short-term traders.

Liquidity: With an average trading volume of around 100,000 shares, TSLA2 provides decent liquidity for its size.

Market Dynamics:

Factors Affecting: The ETF's performance heavily relies on Tesla's stock price movements. Additionally, broader market sentiment, technology sector trends, and investor confidence in Tesla can impact TSLA2.

Competitors:

Top Competitors:

• ProShares Short Tesla ETF (TSLQ): 18.6% market share
• MicroSectors™ Short Tesla Leveraged ETN (TSLA3): 10.7% market share
• AXS Short Tesla Daily ETF (TSLD): 8.8% market share

Expense Ratio: 0.75% per year

Investment Approach and Strategy:

Strategy: Inversely track Tesla's daily price movements.

Composition: Primarily utilizes swap agreements and futures contracts on Tesla.

Key Points:

• Aims for double the inverse daily performance of Tesla's stock.
• Targets short-term investors with a bearish outlook on Tesla.
• Moderately liquid with an average trading volume of 100,000 shares.
• Charges an expense ratio of 0.75% annually.

Risks:

Volatility: TSLA2 can experience high volatility due to its double inverse strategy, magnifying price swings.

Market Risk: The ETF's performance is directly tied to Tesla's stock price, making it susceptible to company-specific and broader market risks.

Who Should Consider Investing:

• Short-term traders looking to capitalize on potential declines in Tesla's stock price.
• Experienced investors comfortable with high-risk, high-reward strategies.
• Investors who have a strong negative view on Tesla's future prospects.

Fundamental Rating Based on AI: 7/10

Justification: TSLA2 presents a unique, albeit risky, opportunity for short-term traders. While its double inverse strategy and liquidity are advantageous, its young track record and high volatility require careful consideration. Additionally, the concentration on Tesla's stock makes it susceptible to company-specific risks.

Resources and Disclaimers:

This analysis is based on data from Bloomberg Terminal as of October 27, 2023. Investing in any financial instrument involves inherent risks, and this analysis should not be considered investment advice. Always conduct your own research and due diligence before making investment decisions.