MicroSectorsTM Oil & Gas Exploration & Production 3X Leveraged ETNs (OILU)

Overview

The MicroSectors Oil & Gas Exploration & Production 3X Leveraged ETNs (OILU) are exchange-traded notes that seek to provide investors with a leveraged return based on the performance of an index comprised of US-listed companies involved in oil and gas exploration and production. These ETNs offer 3x daily leveraged exposure, meaning they aim to deliver three times the daily percentage change of the underlying index. OILU is designed for sophisticated investors seeking short-term, tactical exposure to the oil and gas exploration and production sector.

Reputation and Reliability

REX Shares is the issuer. While relatively newer compared to established ETF providers, REX Shares focuses on leveraged and inverse products. Assessment of their reliability depends on individual risk tolerance and investment goals.

Management Expertise

REX Shares specializes in creating and managing complex ETFs and ETNs, including leveraged and inverse products. Their team possesses expertise in structured products and derivatives.

Goal

To seek a return that is 3x the daily performance of the Solactive Oil & Gas Exploration & Production Index.

Investment Approach and Strategy

Strategy: Tracks the Solactive Oil & Gas Exploration & Production Index with 3x daily leverage.

Composition The ETN's value is linked to the performance of the underlying index, which consists of publicly traded companies involved in oil and gas exploration and production. No direct asset holdings.

Market Share: OILU holds a relatively small market share compared to broader oil and gas ETFs.

Total Net Assets (AUM): 79000000

Key Competitors

• Direxion Daily Energy Bull 3X Shares (ERX)
• ProShares Ultra Oil & Gas (DIG)

Competitive Landscape

The leveraged oil and gas ETF industry is competitive, with several providers offering similar products. OILU competes with other leveraged ETFs such as ERX and DIG. Advantages of OILU could be its specific index tracking or lower expense ratio, while disadvantages stem from the inherent risks of leveraged products and potential tracking error.

Historical Performance: Historical performance is highly volatile due to the 3x leverage and the fluctuations in oil and gas prices.

Benchmark Comparison: Performance should be compared to 3x the Solactive Oil & Gas Exploration & Production Index, but tracking error can occur due to the nature of leveraged products.

Expense Ratio: 0.95

Average Trading Volume

OILU's average trading volume is moderately liquid, but it can vary significantly depending on market conditions.

Bid-Ask Spread

The bid-ask spread can be wider compared to more liquid ETFs, especially during volatile periods, due to the leveraged nature of the ETN.

Market Environment Factors

Oil prices, geopolitical events, and macroeconomic conditions significantly influence OILU's performance.

Growth Trajectory

OILU's growth depends on investor appetite for leveraged exposure to the oil and gas sector.

Competitive Edge

OILU's main competitive advantage is providing 3x leveraged exposure to a specific segment of the energy market. It is one of the few ETNs offering this particular level of leverage and focus. Its niche market focus caters to investors seeking amplified returns from oil and gas exploration and production companies. The value proposition relies on the potential for higher gains, coupled with heightened risk, appealing to short-term traders and those with strong convictions about the sector's immediate prospects.

Volatility

OILU is extremely volatile due to the 3x leverage. Substantial losses can occur rapidly.

Market Risk

OILU is subject to significant market risk, particularly related to fluctuations in oil prices and the performance of oil and gas exploration and production companies.

Ideal Investor Profile

OILU is designed for sophisticated investors with a high risk tolerance who understand the complexities of leveraged products. It is best suited for experienced traders seeking short-term tactical exposure.

Market Risk

OILU is not suitable for long-term investors or those seeking passive index exposure. It's designed for active traders with a short-term outlook.

MicroSectors Oil & Gas Exploration & Production 3X Leveraged ETNs (OILU) offers a leveraged investment in oil and gas exploration and production companies. Due to its 3x leverage, it is inherently volatile and best suited for sophisticated investors with short-term investment horizons. Performance is highly sensitive to oil price fluctuations and company-specific events. The ETN carries significant risks, including potential for rapid and substantial losses. Investors should carefully consider their risk tolerance and investment objectives before investing in OILU.

Data Sources:

• REX Shares Website
• ETF.com
• Bloomberg
• Morningstar

Disclaimers:

The data provided is for informational purposes only and does not constitute investment advice. Leveraged ETFs and ETNs are complex instruments and involve significant risks. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.