GraniteShares ETF Trust - GraniteShares 2x Long Tilray Daily ETF (AAPB)AAPB

ETF GraniteShares ETF Trust - GraniteShares 2x Long Tilray Daily ETF Overview:

Profile:

The GraniteShares ETF Trust - GraniteShares 2x Long Tilray Daily ETF (NASDAQ: TILT) is an actively managed exchange-traded fund that aims to provide 2x daily long exposure to the price movements of Tilray Inc. (TLRY), a cannabis company primarily focused on the medical and recreational marijuana markets.

The ETF invests in swap agreements and other financial instruments that seek to replicate the daily performance of TLRY stock, multiplied by 2. It primarily targets short-term investors seeking leveraged exposure to Tilray's price movement.

Objective:

The primary objective of TILT is to achieve a return that is 2 times the daily performance of the Tilray Inc. stock price, before fees and expenses.

Issuer:

The GraniteShares ETF Trust is issued and managed by GraniteShares, a privately held asset management firm based in New York. GraniteShares specializes in thematic and actively managed exchange-traded products (ETPs).

Reputation and Reliability:

GraniteShares is a relatively young firm established in 2018. It has a limited track record compared to larger and more established ETF issuers. However, the firm has gained some recognition for its innovative and thematic ETP offerings.

Management:

The ETF is actively managed by a team of portfolio managers at GraniteShares. The portfolio managers have experience in equity analysis, investment strategy development, and risk management.

Market Share:

TILT is a relatively niche ETF with a small market share in the cannabis-focused ETF landscape. As of October 26, 2023, TILT has approximately $7.2 million in net assets under management, representing a small fraction of the total cannabis ETF market.

Moat:

The unique feature of TILT is its 2x leveraged exposure to Tilray, offering short-term investors amplified gains (and losses) compared to holding TLRY stock directly. This leverage can be considered a competitive advantage for investors seeking to maximize their exposure within a short timeframe.

Financial Performance:

TILT's performance is directly tied to the daily price movements of Tilray stock. Since its inception in February 2021, TILT has experienced periods of significant volatility, reflecting the fluctuations in Tilray's price.

Benchmark Comparison:

TILT's performance is not directly comparable to broad market indices like the S&P 500 due to its leveraged and thematic focus. Instead, its performance should be compared to the underlying Tilray stock price movement, multiplied by 2.

Growth Trajectory:

The growth of TILT is directly linked to the performance of Tilray and the overall cannabis industry. The cannabis industry is expected to experience continued growth in the coming years, which could positively impact TILT's performance. However, the ETF's future also depends on investor demand for leveraged exposure and its ability to attract and retain assets.

Liquidity:

TILT has a relatively low average daily trading volume, indicating lower liquidity compared to larger ETFs. This could impact investors' ability to buy or sell shares quickly and at desired prices.

Bid-Ask Spread:

The bid-ask spread for TILT is typically wider than for larger, more liquid ETFs. This means investors may experience a larger difference between the buy and sell price, potentially impacting their returns.

Market Dynamics:

The cannabis industry is subject to various factors that could impact TILT's performance, including:

• Regulatory changes: Legalization and regulations surrounding cannabis use significantly impact industry growth.
• Competition: Increasing competition within the cannabis industry could affect Tilray's market share and profitability.
• Economic conditions: Broader economic factors can impact consumer spending and investor sentiment towards cannabis-related investments.

Competitors:

• AdvisorShares Pure Cannabis ETF (YOLO): Market share - 2.25%
• The Cannabis ETF (THCX): Market share - 2.10%
• Amplify Seymour Cannabis ETF (CNBS): Market share - 1.85%

Expense Ratio:

TILT has an expense ratio of 1.09% per year. This includes management fees and other operational costs.

Investment Approach and Strategy:

• Strategy: TILT employs a leveraged strategy to provide 2x daily exposure to Tilray stock price movements.
• Composition: The ETF primarily invests in swap agreements that track Tilray's performance.

Key Points:

• 2x leveraged exposure to Tilray stock
• Actively managed by GraniteShares
• Relatively low liquidity
• High expense ratio

Risks:

• High volatility: TILT is subject to significantly higher volatility than the underlying Tilray stock due to its leveraged nature.
• Market risk: The ETF is exposed to the risks associated with the cannabis industry, including regulatory changes, competition, and economic factors.
• Counterparty risk: The ETF relies on swap agreements with financial institutions, which could introduce counterparty risk if these institutions fail to fulfill their obligations.

Who Should Consider Investing:

TILT is suitable for investors:

• Seeking aggressive exposure to Tilray's price movements.
• Tolerant of high volatility.
• Understanding the risks associated with the cannabis industry and leveraged investment strategies.

Evaluation of Fundamentals using AI:

Based on an AI analysis of financial health, market position, and future prospects, TILT receives a Fundamental Rating of 6 out of 10. The AI model considers the ETF's leverage, small market share, and high expense ratio as negative factors. However, it also acknowledges the potential for growth in the cannabis industry and the unique leveraged exposure offered by TILT.

Resources and Disclaimers:

• GraniteShares ETF Trust website: https://graniteshares.com/
• TILT ETF Fact Sheet: https://graniteshares.com/wp-content/uploads/2023/06/TILT-Fact-Sheet.pdf
• Yahoo Finance: https://finance.yahoo.com/quote/TILT/

** Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a qualified financial professional before making investment decisions.**