MicroSectors FANG+ Index -3X Inverse Leveraged ETN (FNGD)

Overview

The MicroSectors FANG+ Index -3X Inverse Leveraged ETN (ticker: FNGD) provides -3x leveraged exposure to the NYSE FANG+ Index, which represents a concentrated portfolio of highly liquid growth stocks in the technology and consumer discretionary sectors. It aims to provide daily inverse leveraged returns based on the performance of the index. FNGD is an Exchange Traded Note, subjecting it to credit risk.

Reputation and Reliability

REX Shares is the issuer. While relatively new, REX Shares specializes in leveraged and inverse products.

Management Expertise

REX Shares focuses on developing and managing leveraged and inverse ETFs and ETNs.

Goal

To seek daily investment results, before fees and expenses, that correspond to -3x the daily performance of the NYSE FANG+ Index.

Investment Approach and Strategy

Strategy: The ETN seeks to provide inverse leveraged exposure to the NYSE FANG+ Index on a daily basis. It uses financial instruments such as swap agreements to achieve its leveraged exposure.

Composition The ETN's value is derived from the performance of the NYSE FANG+ Index and is not backed by a portfolio of physical assets.

Market Share: FNGD's market share within the leveraged inverse technology sector is limited, competing with other broader market leveraged inverse ETFs.

Total Net Assets (AUM): 120000000

Key Competitors

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

Competitive Landscape

The competitive landscape consists of other leveraged and inverse ETFs targeting the technology sector or the broader market. FNGD's advantage lies in its specific focus on the FANG+ stocks, providing more concentrated exposure. A disadvantage is its greater volatility and potential for significant losses compared to less-leveraged or non-leveraged ETFs.

Historical Performance: Due to the leveraged nature of the ETN, historical performance is highly volatile and path-dependent. It is not suitable for long-term holding.

Benchmark Comparison: The ETN aims to provide -3x the *daily* performance of the NYSE FANG+ Index. Due to compounding, long-term performance will deviate significantly from -3x the index's return.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume for FNGD is moderate, usually sufficient for most traders, but can fluctuate.

Bid-Ask Spread

The bid-ask spread for FNGD can be relatively wide, especially during volatile market conditions, impacting trading costs.

Market Environment Factors

Economic growth, interest rate changes, investor sentiment towards technology and growth stocks, and geopolitical events can significantly impact FNGD's performance.

Growth Trajectory

The growth trajectory is dependent on the increasing popularity of leveraged inverse products and the continued performance of the underlying FANG+ stocks. Changes in investor preferences for these stocks can greatly affect FNGD.

Competitive Edge

FNGD's competitive edge is its focused, leveraged inverse exposure to the NYSE FANG+ Index, offering traders a targeted tool for expressing bearish views or hedging positions. It allows sophisticated investors to potentially amplify short-term gains from declines in the FANG+ stocks. However, its leveraged nature also magnifies losses, making it unsuitable for buy-and-hold investors. FNGD appeals to traders seeking short-term tactical opportunities.

Volatility

FNGD exhibits extremely high volatility due to its -3x leverage factor, making it substantially riskier than non-leveraged ETFs.

Market Risk

FNGD is subject to significant market risk due to its inverse relationship with the NYSE FANG+ Index. Fluctuations in the FANG+ stocks can lead to rapid and substantial losses. Furthermore, as an ETN, it carries the credit risk of the issuer, REX Shares.

Ideal Investor Profile

The ideal investor for FNGD is a sophisticated, active trader with a high-risk tolerance and a short-term investment horizon. They should have a deep understanding of leveraged products and the factors driving the performance of the FANG+ stocks.

Market Risk

FNGD is best suited for active traders seeking short-term tactical opportunities to profit from anticipated declines in the FANG+ stocks. It is not suitable for long-term investors, passive index followers, or those with low-risk tolerance.

The MicroSectors FANG+ Index -3X Inverse Leveraged ETN (FNGD) is a high-risk, high-reward ETN designed to provide -3x leveraged inverse exposure to the NYSE FANG+ Index on a *daily* basis. Its leveraged nature makes it a volatile and path-dependent instrument, unsuitable for long-term investors. It is best used by sophisticated, active traders seeking short-term tactical opportunities to profit from anticipated declines in the FANG+ stocks. Due to its structure as an ETN, it carries credit risk associated with REX Shares.

Data Sources:

• REX Shares
• NYSE
• FactSet
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investing in leveraged and inverse products involves significant risk of loss.