GraniteShares 2x Long SMCI Daily ETF (SMCL)

Overview

The GraniteShares 2x Long SMCI Daily ETF (SMUI) seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily percentage change of the common stock of Super Micro Computer, Inc. (SMCI). It provides leveraged exposure to a single technology stock.

Reputation and Reliability

GraniteShares is a provider of leveraged and inverse ETFs, known for their specialized product offerings. They are relatively smaller compared to major ETF issuers.

Management Expertise

GraniteShares' management team focuses on creating and managing niche ETFs, including leveraged and inverse products.

Goal

To seek daily investment results, before fees and expenses, that correspond to two times (2x) the daily percentage change of Super Micro Computer, Inc. (SMCI) common stock.

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy to magnify the daily performance of SMCI stock. It is designed for short-term trading and is not suitable for buy-and-hold investors.

Composition The ETF primarily holds financial instruments such as swap agreements and other derivatives to achieve its 2x leverage to SMCI's daily price movement.

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

Total Net Assets (AUM): 126775053

Key Competitors

• Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL)
• ProShares Ultra Semiconductors ETF (USD)
• GraniteShares 1.5x Long NVDA Daily ETF (NVDL)

Competitive Landscape

The leveraged ETF market is competitive, with several issuers offering similar products targeting different sectors and individual stocks. SMUI differentiates itself by focusing solely on SMCI with 2x leverage. A key disadvantage is its single-stock concentration, making it highly volatile compared to broader semiconductor ETFs. The advantages include its ability to provide magnified daily returns, appealing to short-term traders seeking high-risk, high-reward opportunities.

Historical Performance: Historical performance is characterized by high volatility due to the leveraged nature of the ETF and the underlying stock's price swings.

Benchmark Comparison: The ETF aims to deliver twice the daily performance of SMCI, so its benchmark is effectively 2x SMCI's daily return. Tracking error can occur due to fees, expenses, and the complexities of leveraged investing.

Expense Ratio: 1.68

Average Trading Volume

SMUI's average trading volume varies, but is generally sufficient for traders to enter and exit positions, though it can be less liquid than broader market ETFs.

Bid-Ask Spread

The bid-ask spread can be wider than more liquid ETFs, reflecting the higher risk and specialized nature of the fund.

Market Environment Factors

The ETF is highly sensitive to news and events affecting SMCI and the broader technology sector, including earnings reports, product announcements, and macroeconomic trends.

Growth Trajectory

The growth trajectory is tied directly to investor interest in SMCI and the demand for leveraged exposure. Significant events affecting SMCI can rapidly change the ETF's value.

Competitive Edge

SMUI's competitive advantage lies in its focused, leveraged exposure to SMCI, appealing to traders seeking amplified daily returns. This niche focus differentiates it from broad-based or unleveraged semiconductor ETFs. The ETF's targeted strategy allows it to capitalize on short-term movements in SMCI's stock price more directly than diversified funds. However, its concentrated exposure and leveraged structure also introduce significant risks and it's designed for a very specific, short-term trading strategy.

Volatility

SMUI exhibits very high volatility due to its 2x leverage and single-stock concentration.

Market Risk

Market risk is substantial due to the ETF's reliance on SMCI's performance. Any negative news or events affecting SMCI can have a magnified negative impact on the ETF.

Ideal Investor Profile

The ideal investor is an experienced, sophisticated trader with a high-risk tolerance and a short-term investment horizon.

Market Risk

SMUI is best suited for active traders seeking short-term, leveraged exposure to SMCI, not for long-term investors or passive index followers.

GraniteShares 2x Long SMCI Daily ETF (SMUI) offers leveraged exposure to Super Micro Computer, Inc. (SMCI) stock, seeking to deliver twice the stock's daily percentage change. It's a high-risk, high-reward product designed for sophisticated short-term traders, not for long-term investors. Its concentrated single-stock strategy and leveraged structure make it highly volatile. Investors should be aware of the potential for rapid losses and carefully consider their risk tolerance before investing.

Data Sources:

• GraniteShares ETF Website
• ETF.com
• SEC Filings

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor. Leveraged ETFs are complex financial instruments and may not be suitable for all investors. Past performance is not indicative of future results.