AdvisorShares Trust - AdvisorShares MSOS 2x Daily ETF (MSOX)

Overview

The AdvisorShares MSOS 2x Daily ETF (MSOX) seeks daily investment results, before fees and expenses, of 200% of the performance of the AdvisorShares Pure US Cannabis ETF (MSOS). It provides leveraged exposure to U.S. cannabis companies.

Reputation and Reliability

AdvisorShares is known for its actively managed ETFs, including those focused on niche sectors. While innovative, it's important to consider the risks associated with leveraged ETFs.

Management Expertise

AdvisorShares has a dedicated management team experienced in managing actively managed and thematic ETFs.

Goal

To achieve daily investment results, before fees and expenses, that correspond to two times (200%) the daily performance of the AdvisorShares Pure US Cannabis ETF (MSOS).

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy, seeking 2x the daily performance of MSOS. This involves using derivatives and other financial instruments to amplify returns (and losses).

Composition The ETF does not directly hold stocks. Instead, it uses financial instruments such as swap agreements to achieve its leveraged exposure to MSOS.

Market Share: Difficult to determine exact market share due to the unique leveraged structure and its relation to MSOS. It's a derivative of MSOS's performance.

Total Net Assets (AUM): 23610168

Key Competitors

• AdvisorShares Pure US Cannabis ETF (MSOS)
• CANSLIM Cannabis ETF (TOKE)
• Amplify Alternative Harvest ETF (MJ)

Competitive Landscape

The competitive landscape consists of cannabis-focused ETFs. MSOX's advantage is its leveraged exposure, offering higher potential returns (and risks). Disadvantages include higher volatility and potential for significant losses due to the leveraged nature, and it will be subjected to compounding effects.

Historical Performance: Historical performance is highly dependent on the daily performance of MSOS. Due to its leverage, returns and losses are amplified.

Benchmark Comparison: The ETF aims to achieve 2x the daily performance of MSOS, making MSOS its de facto benchmark. Tracking error and fees can impact performance.

Expense Ratio: 0.86

Average Trading Volume

The average trading volume for MSOX represents moderate liquidity, which can affect ease of entry and exit for larger positions.

Bid-Ask Spread

The bid-ask spread provides an indication of trading costs and typically reflects the ETF's liquidity and volatility.

Market Environment Factors

MSOX is highly sensitive to regulatory changes, market sentiment towards cannabis, and the performance of U.S. cannabis companies. Political and legislative developments significantly influence the sector.

Growth Trajectory

Growth is tied to the expansion and legalization of cannabis in the U.S., as well as investor appetite for risk and leveraged products. Changes to the underlying MSOS portfolio will also impact MSOX.

Competitive Edge

MSOX offers a unique proposition with its 2x leveraged exposure to U.S. cannabis companies, differentiating it from standard cannabis ETFs. This leverage can amplify returns for investors who are bullish on the sector and willing to accept higher risk. However, this comes with increased volatility and potential for greater losses, making it unsuitable for all investors. The ETF's success is directly tied to the performance of MSOS and the accuracy of its daily tracking.

Volatility

MSOX exhibits high volatility due to its leveraged nature, making it more susceptible to sharp price swings.

Market Risk

The primary market risk is related to the performance of U.S. cannabis companies, which are subject to regulatory, competitive, and economic factors.

Ideal Investor Profile

MSOX is suitable for sophisticated investors with a high risk tolerance who seek short-term, leveraged exposure to the U.S. cannabis sector.

Market Risk

MSOX is best suited for active traders seeking short-term gains and willing to monitor their positions closely due to the leveraged nature of the ETF.

The AdvisorShares MSOS 2x Daily ETF provides leveraged exposure to U.S. cannabis companies through a derivative of the MSOS ETF. Its daily 2x leverage seeks to amplify returns, but also magnifies risks and is designed for short-term trading. The ETF's performance is heavily reliant on the underlying performance of MSOS and is subject to regulatory changes impacting the cannabis industry. Due to its volatility and leveraged structure, it is only suitable for sophisticated investors with high risk tolerance and a short-term investment horizon. Investors should carefully consider the risks before investing.

Data Sources:

• AdvisorShares website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. 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.