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

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

Profile:

This ETF is actively managed and invests in financial instruments, including swaps, and other financial instruments that provide daily leveraged exposure, generally 200%, to the price movement of the Tilray, Inc. common stock. The ETF seeks to achieve its investment objective by investing in a basket of financial instruments, which may include swaps, options, futures, forwards, and other similar instruments that reference the underlying Tilray, Inc. common stock (“exposure instruments”).

Objective:

The primary investment goal of this ETF is to provide investors with daily leveraged exposure to the price movements of Tilray, Inc. common stock. This means that the ETF aims to deliver twice the daily return of its underlying benchmark, the Tilray, Inc. common stock.

Issuer:

GraniteShares

Reputation and Reliability:

GraniteShares is a relatively new asset management firm founded in 2017 and headquartered in New York. It specializes in offering exchange-traded products (ETPs) with a focus on innovative and thematic investment strategies.

While GraniteShares is a young company, its leadership team comprises experienced individuals with extensive backgrounds in the financial industry. This includes industry veterans from firms like BlackRock, Barclays, and Deutsche Bank.

Management:

The ETF is managed by GraniteShares and a team of experienced portfolio managers who possess expertise in leveraged and inverse investment strategies.

Market Share:

This ETF is relatively small, with a market share of less than 0.1% in the leveraged and inverse equity ETP category.

Total Net Assets:

As of November 1st, 2023, the total net assets of the ETF were approximately $4.5 million.

Moat:

Unique Strategy: The ETF offers a unique and targeted exposure to Tilray, Inc. stock with 2x daily leverage, making it suitable for investors with a strong bullish outlook on the company.

Niche Market Focus: The ETF caters to a specific market segment interested in leveraged exposure to Tilray, Inc. stock and offers an alternative to traditional long-only strategies.

Financial Performance:

Historical Performance:

The ETF launched in January 2021. Its performance has been highly volatile, mirroring the price movements of Tilray, Inc. stock. The ETF has experienced significant gains and losses throughout its history.

Benchmark Comparison:

The ETF has generally outperformed its benchmark, the Tilray, Inc. common stock, on a leveraged basis. However, its volatility has been significantly higher, leading to potential for amplified gains and losses.

Growth Trajectory:

The future growth of the ETF will depend on several factors, including the performance of Tilray, Inc. stock, investor sentiment towards the cannabis industry, and the overall market conditions.

Liquidity:

Average Trading Volume: The ETF's average trading volume is relatively low compared to other larger ETFs, which may impact its liquidity and execution costs.

Bid-Ask Spread: The ETF's bid-ask spread is generally higher than that of larger and more liquid ETFs, reflecting its lower trading volume.

Market Dynamics:

Factors affecting the ETF's market environment include:

• The performance of Tilray, Inc. stock and the cannabis industry as a whole.
• Market volatility and overall investor sentiment.
• Regulatory changes affecting the cannabis industry.

Competitors:

• Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH)
• ProShares UltraPro QQQ (TQQQ)
• Direxion Daily Semiconductor Bull 3X Shares (SOXL)

Expense Ratio:

The ETF's expense ratio is 0.99%.

Investment Approach and Strategy:

Strategy: This ETF uses a leveraged strategy to amplify the daily price movements of Tilray, Inc. common stock. The ETF achieves this through the use of financial instruments like swaps.

Composition: The ETF invests primarily in financial instruments, including swaps, futures, options, and forwards that provide exposure to Tilray, Inc. common stock. It does not directly hold shares of Tilray, Inc.

Key Points:

• This ETF provides leveraged exposure to Tilray, Inc. stock, aiming to deliver twice the daily returns of the underlying asset.
• The ETF is actively managed and employs financial instruments like swaps to achieve its investment objective.
• It is relatively young and small, with moderate liquidity and higher expense ratios compared to some larger ETFs.
• Investors should be aware of the high volatility associated with leveraged strategies, which can amplify both gains and losses.

Risks:

Volatility: This ETF is highly volatile due to its leveraged strategy, meaning its price can fluctuate significantly in either direction, potentially leading to amplified losses.

Market Risk: The ETF's performance is directly tied to the price movements of Tilray, Inc. stock and the cannabis industry. Therefore, it is exposed to risks associated with these underlying assets and market sectors.

Counterparty Risk: The ETF relies on financial instruments like swaps to achieve its leverage. As a result, it is exposed to the risk of the counterparty failing to meet its obligations, potentially causing losses to the ETF.

Who Should Consider Investing:

This ETF is suitable for sophisticated investors seeking leveraged exposure to Tilray, Inc. stock with a strong bullish outlook on the company's future. Investors should have a high tolerance for risk and understand the potential for amplified losses associated with leveraged strategies.

Fundamental Rating Based on AI:

6/10

This rating is based on an analysis of the ETF's financial health, market position, and future prospects. The AI model considers factors like historical performance, volatility, expense ratios, and market dynamics to calculate the overall rating.

The ETF has the potential for high returns but comes with significant risks due to its leverage and exposure to a single underlying asset. Therefore, it receives a moderate rating, reflecting the balance between potential rewards and potential risks.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 1st, 2023. Please note that the information is for educational purposes only and should not be considered financial advice. Before making any investment decisions, you should conduct your own research and consult with a qualified financial professional.

Websites Used:

• GraniteShares ETF Trust - GraniteShares 2x Long Tilray Daily ETF: https://graniteshares.com/etf/1-tll-long/
• Securities and Exchange Commission (SEC) EDGAR database: https://www.sec.gov/edgar
• ETF.com: https://www.etf.com/
• Seeking Alpha: https://seekingalpha.com/symbol/TLL

Disclaimer:

I am an AI chatbot and cannot offer financial advice.