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

ETF T-Rex 2X Inverse Tesla Daily Target ETF Overview

Profile:

• Focus: ETF T-Rex 2X Inverse Tesla Daily Target seeks daily investment results that are -200% of the daily performance of the Tesla® Index. The index comprises ordinary shares of Tesla, Inc., the electric vehicle and clean energy company.
• Asset Allocation: The fund invests its assets in the following: Equity Securities, Money Market Instruments (including Repurchase Agreements), Options, Total Return Swaps, Cash.
• Investment Strategy: Utilizes derivatives and other instruments to achieve its daily target objective. It aims to profit from short-term changes in the underlying index.

Objective:

The primary investment goal is to deliver returns that are -200% of the Tesla® Index's performance each day.

Issuer:

• Company: Innovator ETFs Trust
• Reputation and Reliability: Innovator ETFs Trust is a relatively new ETF provider founded in 2014. However, it is a subsidiary of VanEck, a well-established investment management firm with a positive reputation.
• Management: The team behind Innovator ETFs boasts extensive experience in product development, ETF structuring, and index management.

Market Share:

• The ETF is relatively new with a small market share in the inverse ETF space.

Total Net Assets:

• Approximately $12 million as of January 26, 2023.

Moat:

• Unique Target: Invests in one of the most recognizable and volatile stocks in the market.
• Daily Target: Aims to achieve its -200% target on a daily basis, focusing on short-term opportunities.
• Inverse Strategy: Offers exposure to potential downside movements in Tesla's stock price.

Financial Performance:

• The ETF is relatively new, making detailed historical performance analysis challenging.
• Its actual performance might significantly deviate from its stated objective due to factors like compounded returns and expenses.

Growth Trajectory:

• Growth potential depends on the market's volatility and investor sentiment towards Tesla, which are inherently unpredictable.

Liquidity:

• Average Trading Volume: Approximately 11,000 shares.
• Bid-Ask Spread: Relatively high compared to other ETFs, indicating lower liquidity.

Market Dynamics:

• Economic indicators, interest rate changes, and competitor actions can impact the ETF's performance.
• Market sentiment towards Tesla is a critical driver of the fund's direction.

Competitors:

• TQQQ (-3* daily performance of the Nasdaq-100 Index)
• SDOW (-2* daily performance of the Dow Jones Industrial Average Index)
• SPXU (-2* daily performance of the S&P 500 Index)
• RWM (-2* daily performance of the Russell 2000 Index)

Expense Ratio:

• 0.95%

Investment Approach and Strategy:

• Strategy: Aims for daily returns of -200% of the Tesla® Index performance.
• Composition: Primarily invests in derivative instruments to achieve its objective.

Key Points:

• Designed for short-term trading and speculation based on anticipated price declines in Tesla shares.
• Carries significant risk due to its volatility and leveraged nature.
• Not suitable for investors seeking long-term growth or capital preservation.

Risks:

• High Volatility: Due to its inverse strategy, the ETF's price can fluctuate dramatically.
• Market Risk: Tesla's stock performance significantly impacts the fund's direction.
• Leveraged Exposure: Magnifies both gains and losses, amplifying volatility and potential risks.

Who Should Consider Investing:

• Experienced investors comfortable with significant volatility and risk.
• Individuals expecting Tesla's price to decline in the short term.
• Those seeking short-term trading opportunities within a specific market niche.

Fundamental Rating Based on AI:

• 6/10

Justification:

The AI system assigned a rating of 6 out of 10. This considers factors like the ETF's unique focus, leveraged strategy, and limited track record. However, its above-average expense ratio and reliance on a single stock for performance weigh on the score.

Resources and Disclaimers:

• Innovator ETFs: https://innovatoretfs.com/
• Bloomberg Terminal: https://www.bloomberg.com/professional/solution/terminal/
• This analysis is for informational purposes only and should not be considered investment advice. Individual investors should do their research and consult a financial advisor before making investment decisions.

Disclaimer:

I am not a financial advisor, and this information should not be considered financial advice. It is essential to conduct thorough research and consult a qualified financial professional before making any investment decisions.