GraniteShares 2x Long MSFT Daily ETF (MSFL)

Overview

The GraniteShares 2x Long MSFT Daily ETF (MSFTL) seeks daily investment results, before fees and expenses, of 200% of the daily performance of the common stock of Microsoft Corporation. It is a leveraged ETF focused on a single stock, aiming to magnify daily gains (and losses) of MSFT. The ETF's investment strategy is to use financial instruments such as swap agreements to achieve its leveraged exposure.

Reputation and Reliability

GraniteShares is a smaller ETF provider known for its leveraged and inverse single-stock ETFs. Their reputation is built on providing tools for sophisticated investors seeking short-term tactical exposure.

Management Expertise

The management team at GraniteShares specializes in managing leveraged and inverse ETFs, requiring expertise in financial derivatives and daily rebalancing.

Goal

To seek daily investment results, before fees and expenses, of 200% of the daily performance of the common stock of Microsoft Corporation.

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy, using derivatives to achieve 2x the daily return of MSFT.

Composition The ETF primarily holds financial instruments (e.g., swap agreements) designed to provide leveraged exposure to Microsoft stock. It does not directly hold substantial amounts of MSFT stock.

Market Share: The market share of MSFTL is relatively small compared to broad market ETFs, as it caters to a niche market of investors seeking leveraged exposure to a single stock.

Total Net Assets (AUM): 55700000

Key Competitors

• Direxion Daily MSFT Bull 1.5X Shares (MSFU)
• REX 2x Long Microstrategy ETN (MSTR)
• Leveraged ETFs on other individual stocks

Competitive Landscape

The competitive landscape is characterized by a few providers offering leveraged single-stock ETFs. MSFTL's advantage lies in its 2x leverage, while competitors may offer different leverage ratios or focus on different stocks. A disadvantage is the inherent risk and volatility associated with leveraged products, making them unsuitable for all investors.

Historical Performance: Historical performance is highly dependent on the daily movements of Microsoft stock, magnified by the 2x leverage. Due to the nature of leveraged ETFs, long-term performance can significantly deviate from 2x the performance of MSFT due to compounding.

Benchmark Comparison: The ETF's performance is benchmarked against 2x the daily performance of MSFT. However, due to daily rebalancing, it is not designed to track 2x the long-term performance of MSFT.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume of MSFTL is moderate, indicating sufficient liquidity for typical trading activity.

Bid-Ask Spread

The bid-ask spread can vary depending on market conditions and trading volume, but it is generally wider than that of more liquid, broad-based ETFs due to the leveraged nature and focus on a single stock.

Market Environment Factors

The ETF's performance is directly influenced by the performance of Microsoft stock, which in turn is affected by factors such as the tech sector's performance, overall market sentiment, and company-specific news and earnings reports.

Growth Trajectory

The growth trajectory of MSFTL is tied to the demand for leveraged exposure to Microsoft. Changes in investor sentiment towards MSFT and technological advancements could influence its holdings and strategy.

Competitive Edge

MSFTL's advantage lies in providing a straightforward way for investors to gain leveraged exposure to Microsoft stock on a daily basis. It offers a defined and transparent leverage ratio, making it easier for sophisticated investors to implement short-term trading strategies. The ETF's focus on a single, well-known stock like Microsoft enhances its appeal. However, the high risk and potential for rapid losses limit its suitability to experienced traders.

Volatility

The ETF experiences high volatility due to its 2x leverage, meaning daily gains and losses are amplified compared to the underlying Microsoft stock.

Market Risk

The ETF is subject to market risk related to Microsoft stock. Company-specific risks, such as disappointing earnings or negative news, can significantly impact the ETF's value. Additionally, the leveraged structure increases the risk of substantial losses, especially over longer holding periods due to compounding.

Ideal Investor Profile

The ideal investor is a sophisticated, short-term trader with a high-risk tolerance who seeks leveraged exposure to Microsoft stock for tactical purposes.

Market Risk

This ETF is best suited for active traders seeking short-term gains and is not appropriate for long-term investors due to the effects of compounding and the high risk of capital erosion.

GraniteShares 2x Long MSFT Daily ETF offers a leveraged way to gain short-term exposure to Microsoft stock's daily performance. It's designed for sophisticated traders who understand the risks associated with leveraged ETFs. Due to daily rebalancing and compounding, long-term performance may significantly deviate from 2x MSFT's returns. The ETF's high volatility and market risk make it unsuitable for long-term investors or those with a low-risk tolerance. Investors should carefully consider the ETF's objectives, risks, and fees before investing.

Data Sources:

• GraniteShares website
• ETF.com
• Yahoo Finance
• SEC Filings

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investing in ETFs involves risk, including the potential loss of principal. Leveraged ETFs are particularly risky and are not suitable for all investors. Consult with a qualified financial advisor before making any investment decisions.