MicroSectors™ Gold -3X Inverse Leveraged ETN (DULL)

Overview

The MicroSectorsu2122 Gold -3X Inverse Leveraged ETN (GBUG) is an exchange-traded note designed to provide investors with a -3x leveraged inverse exposure to the daily performance of gold futures. It targets investors seeking short-term, amplified inverse returns on gold.

Reputation and Reliability

The issuer is REX Shares, which is known for offering leveraged and inverse exchange-traded products. They have a moderate track record in the market.

Management Expertise

REX Shares specializes in managing complex ETPs, with expertise in leveraged and inverse strategies.

Goal

To seek daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the Solactive Gold Front Month Rolling Futures Index.

Investment Approach and Strategy

Strategy: This ETN uses leverage to amplify the inverse performance of gold futures, resetting daily to maintain the target leverage ratio.

Composition The ETN's composition is based on financial instruments linked to the Solactive Gold Front Month Rolling Futures Index. It does not directly hold physical gold.

Market Share: Relatively small market share due to the niche and high-risk nature of leveraged inverse gold products.

Total Net Assets (AUM): 14200000

Key Competitors

• DZZ
• DGZ

Competitive Landscape

The leveraged inverse gold ETN market is dominated by a few specialized products. GBUG offers a higher leverage factor (-3x) compared to some competitors, which can lead to higher potential returns but also greater risk of losses. Competitors may have different expense ratios or track different gold futures indices, resulting in varying performance.

Historical Performance: Historical performance is highly volatile and dependent on the daily movements of gold futures. Due to the leveraged nature, long-term performance can deviate significantly from the underlying index.

Benchmark Comparison: Performance is benchmarked against the Solactive Gold Front Month Rolling Futures Index, but the -3x leverage factor means that the ETN's returns will be amplified (both positively and negatively) compared to the index.

Expense Ratio: 1.65

Average Trading Volume

The average trading volume can vary but is generally moderate, affecting ease of entry and exit.

Bid-Ask Spread

The bid-ask spread can be relatively wide due to the leveraged nature and potentially lower trading volume.

Market Environment Factors

The ETN is influenced by factors affecting gold prices, such as inflation expectations, interest rates, geopolitical events, and currency fluctuations.

Growth Trajectory

Growth is dependent on investor demand for leveraged inverse gold exposure, which can fluctuate based on market sentiment and expectations regarding gold prices.

Competitive Edge

GBUG's primary advantage is its -3x leverage factor, offering investors amplified inverse exposure to gold futures. This can be attractive to sophisticated traders seeking short-term gains when they anticipate a decline in gold prices. The ETN provides a convenient way to access leveraged inverse exposure without directly trading gold futures contracts. However, the high leverage also means it is a high-risk product and subject to significant volatility and potential losses, especially over longer holding periods.

Volatility

High volatility due to the leveraged nature of the ETN.

Market Risk

Significant market risk associated with fluctuations in gold prices, which can be amplified by the leverage factor.

Ideal Investor Profile

Suitable for sophisticated and experienced traders with a high-risk tolerance who seek short-term leveraged inverse exposure to gold.

Market Risk

Best suited for active traders with a short-term investment horizon and a deep understanding of leveraged products.

GBUG is a high-risk, high-reward ETN designed for sophisticated traders seeking short-term leveraged inverse exposure to gold futures. Its performance is highly sensitive to daily movements in gold prices, and the -3x leverage factor amplifies both gains and losses. Due to the effects of compounding, long-term returns can deviate significantly from the underlying index. This ETN is not suitable for long-term investors or those with a low-risk tolerance, and its use should be carefully considered and actively managed.

Data Sources:

• REX Shares Website
• ETF.com
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Leveraged and inverse ETFs are complex financial instruments and involve a high degree of risk. Investors should consult with a financial advisor before making any investment decisions.