MicroSectors Solactive FANG & Innovation -3X Inverse Leveraged ETNs (BERZ)

Overview

The MicroSectors Solactive FANG & Innovation -3X Inverse Leveraged ETNs (BERZ) provides -3x leveraged exposure to an index composed of FANG stocks and other innovation-focused companies. It aims to deliver three times the inverse of the daily performance of the Solactive FANG Innovation Index.

Reputation and Reliability

REX Shares is known for providing leveraged and inverse products. Their reputation is tied to the volatile nature of such products.

Management Expertise

REX Shares focuses on specialized investment strategies, and their management team possesses expertise in structuring leveraged and inverse ETNs.

Goal

To seek three times the inverse of the daily performance of the Solactive FANG Innovation Index.

Investment Approach and Strategy

Strategy: The ETN employs a leveraged strategy, aiming to deliver three times the inverse of the daily performance of the Solactive FANG Innovation Index. This involves using derivatives and other financial instruments.

Composition The ETN's performance is linked to the Solactive FANG Innovation Index, which comprises companies involved in technology, internet, and other innovative sectors.

Market Share: BERZ's market share within the leveraged inverse technology ETF space is relatively small compared to broader market ETFs.

Total Net Assets (AUM): 33400000

Key Competitors

• ProShares UltraPro Short QQQ (SQQQ)
• Direxion Daily Technology Bear 3X Shares (TECS)
• Direxion Daily Semiconductor Bear 3x Shares (SOXS)

Competitive Landscape

The leveraged/inverse ETF market is competitive, with several providers offering similar products. BERZ competes with larger, more established funds like SQQQ and TECS. Its smaller size could impact liquidity and tracking efficiency. Its advantages may lie in its specific index exposure, catering to investors seeking a tailored inverse bet on FANG and innovation stocks.

Historical Performance: Historical performance varies significantly based on the daily performance of the Solactive FANG Innovation Index. Due to the leverage, performance can be highly volatile.

Benchmark Comparison: The ETN is designed to deliver three times the inverse of the daily performance of its benchmark index; therefore, direct comparison requires accounting for this leverage factor.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume is moderate and can fluctuate based on market interest. Lower values could lead to less efficient execution.

Bid-Ask Spread

The bid-ask spread varies depending on trading volume and market conditions and impacts the cost of entering or exiting positions.

Market Environment Factors

Economic indicators, interest rate changes, and sector-specific news (e.g., regulatory changes, technological advancements) affecting FANG and innovation companies can influence BERZ's performance.

Growth Trajectory

Growth depends on investor appetite for leveraged and inverse products, as well as the sustained performance or underperformance of FANG and innovation stocks. Significant changes to holdings are unlikely given the index-tracking strategy.

Competitive Edge

BERZ's main advantage is its -3x leveraged exposure to the Solactive FANG Innovation Index, offering investors a tool to potentially profit from a decline in these stocks. Its niche focus on FANG and innovation provides a targeted exposure that may be appealing to some. However, the leveraged nature creates unique risks and requires active monitoring. The daily reset feature makes it unsuitable for buy-and-hold strategies, as compounding effects can significantly impact long-term returns.

Volatility

BERZ is expected to exhibit high volatility due to its leveraged nature. Inverse ETFs are generally more volatile than standard ETFs.

Market Risk

The performance is highly sensitive to movements in the Solactive FANG Innovation Index. Losses can be magnified due to the -3x leverage, and these losses can be rapid and significant.

Ideal Investor Profile

Ideal investors are sophisticated traders with a high-risk tolerance who understand the complexities of leveraged and inverse products. They should actively monitor their positions and have a short-term investment horizon.

Market Risk

BERZ is best suited for active traders seeking short-term tactical exposure to potential declines in FANG and innovation stocks. It is not appropriate for long-term investors or those seeking passive index-tracking returns.

The MicroSectors Solactive FANG & Innovation -3X Inverse Leveraged ETNs (BERZ) offers a high-risk, high-reward approach to investing by providing -3x leveraged inverse exposure to FANG and innovation stocks. It is designed for sophisticated traders aiming to profit from short-term declines in these stocks and is not suitable for buy-and-hold strategies. Due to its leveraged structure, its performance is highly volatile, and investors should be aware of the potential for significant losses. Active monitoring and a thorough understanding of the product are essential for investing in BERZ.

Data Sources:

• REX Shares
• Solactive
• ETF.com
• Yahoo Finance

Disclaimers:

The information provided is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Investing in leveraged and inverse ETFs involves significant risks, including the potential loss of principal.