GraniteShares 1.5x Short NVDA Daily ETF (NVD)

Overview

The GraniteShares 1.5x Short NVDA Daily ETF (NVDS) aims to provide 1.5 times the inverse (opposite) of the daily performance of NVIDIA Corporation (NVDA) stock. It is designed for short-term trading and is not suitable for long-term investment due to the effects of compounding. The fund uses financial derivatives, primarily swap agreements, to achieve its leveraged inverse exposure.

Reputation and Reliability

GraniteShares is a relatively smaller ETF provider known for its range of leveraged and inverse ETFs. While not as established as larger firms, they are known for providing niche products. It is important to note that leveraged ETFs have inherent risks.

Management Expertise

The management team at GraniteShares specializes in managing leveraged and inverse products, requiring expertise in derivatives and active trading strategies.

Goal

The investment objective is to provide daily investment results that correspond to one and a half times (1.5x) the inverse (opposite) of the daily performance of the common stock of NVIDIA Corporation.

Investment Approach and Strategy

Strategy: The ETF seeks to achieve its objective by using swap agreements, futures contracts and other derivatives instruments. It is a geared product that resets daily, leading to significant deviation from the target exposure over longer periods.

Composition The ETF primarily holds swap agreements that reference NVIDIA stock, with a small portion potentially held in cash or other short-term instruments.

Market Share: NVDS holds a niche market share within the leveraged single-stock ETF category.

Total Net Assets (AUM): 28870530

Key Competitors

• Direxion Daily NVDA Bear 1X Shares (NVDS)
• AXS 1.25X NVDA Bear Daily ETF (NVQ)

Competitive Landscape

The competitive landscape is relatively concentrated, with a few key players offering leveraged and inverse products on NVIDIA. NVDS offers a higher leverage factor (1.5x short) compared to some competitors, which can appeal to traders seeking more aggressive short exposure. However, this also increases the risk. A disadvantage can be tracking errors, and significant value loss if the underlying asset moves against the intended position.

Historical Performance: Historical performance can be highly volatile and is significantly impacted by the daily reset mechanism. Due to the leveraged nature, past performance is not indicative of future results.

Benchmark Comparison: The ETF's performance should be compared to -1.5x the daily performance of NVIDIA. Over longer periods, the compounding effect will cause significant deviations from this benchmark.

Expense Ratio: 1.15

Average Trading Volume

The average trading volume varies but is generally moderate, indicating reasonable liquidity for short-term trading purposes.

Bid-Ask Spread

The bid-ask spread can fluctuate but is generally wider than more liquid ETFs, reflecting the higher risks and specialized nature of the product.

Market Environment Factors

NVDS is heavily influenced by the performance of NVIDIA, overall semiconductor market trends, and broader market sentiment. Economic indicators and interest rate changes can also indirectly affect the stock.

Growth Trajectory

The growth trajectory of NVDS is directly tied to investor demand for short exposure to NVIDIA. Changes in sentiment towards NVDA or the technology sector can significantly impact the ETF's AUM and trading volume.

Competitive Edge

NVDS provides a higher leveraged short exposure to NVIDIA compared to some competitors, catering to sophisticated traders seeking aggressive strategies. The fund offers a straightforward and transparent way to implement a short-term bearish view on NVIDIA. The targeted exposure is reset daily, minimizing the effects of compounding on any given day. This product has limited competition.

Volatility

NVDS is highly volatile due to its leveraged nature. Small changes in NVIDIA's stock price can result in substantial gains or losses.

Market Risk

The ETF is subject to significant market risk, including the risk of losing a substantial portion of the investment if NVIDIA's stock price increases. Due to the daily reset, longer holding periods can lead to unexpected outcomes.

Ideal Investor Profile

The ideal investor is a sophisticated trader with a short-term bearish outlook on NVIDIA and a thorough understanding of leveraged ETFs. They should be aware of the risks associated with daily compounding and be capable of actively managing their positions.

Market Risk

NVDS is suitable for active traders seeking short-term exposure. It is not suitable for long-term investors or those with a low-risk tolerance.

GraniteShares 1.5x Short NVDA Daily ETF (NVDS) is a leveraged inverse ETF designed for short-term traders who believe NVIDIA's stock price will decline. It provides 1.5 times the inverse daily performance of NVDA through the use of swap agreements. Due to daily resets and compounding, it is not suitable for long-term holding. Investors should carefully consider the high risks and volatility before investing and only use it if they have a strong understanding of leveraged products.

Data Sources:

• GraniteShares Website
• ETF.com
• Bloomberg
• SEC Filings

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Leveraged ETFs are inherently risky and may not be suitable for all investors. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.