Defiance Daily Target 2X Long SMCI ETF (SMCX)

Overview

The Defiance Daily Target 2x Long SMCI ETF (SMCI) aims to provide daily investment results, before fees and expenses, corresponding to two times (2x) the daily performance of NVIDIA Corporation (NVDA). It offers magnified exposure to NVDA, targeting investors with a short-term bullish outlook.

Reputation and Reliability

Defiance ETFs is a relatively new entrant in the ETF market, specializing in thematic and leveraged ETFs. Their reputation is still developing, but they are known for offering innovative and targeted investment products.

Management Expertise

Defiance ETFs' management team has experience in developing and managing various types of ETFs, including leveraged and thematic funds.

Goal

To seek daily investment results, before fees and expenses, corresponding to two times (2x) the daily performance of NVIDIA Corporation (NVDA).

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy, seeking to deliver twice the daily return of NVDA.

Composition Primarily holds financial instruments such as swap agreements and potentially futures contracts designed to provide leveraged exposure to NVDA's daily price movements.

Market Share: The ETF's market share is specific to leveraged single-stock ETFs focused on NVIDIA, representing a portion of the broader leveraged ETF market.

Total Net Assets (AUM): 30.43

Key Competitors

• GraniteShares 2x Long NVDA Daily ETF (NVDL)

Competitive Landscape

The competitive landscape is characterized by a few specialized issuers offering leveraged and inverse ETFs. SMCI competes directly with other leveraged NVDA ETFs like NVDL. Advantages may include a lower expense ratio or better tracking, while disadvantages could stem from lower trading volume or a less established track record.

Historical Performance: Historical performance data is highly dependent on NVIDIA's stock performance and the ETF's ability to accurately track 2x its daily returns. It is characterized by extreme volatility.

Benchmark Comparison: The benchmark is 2x the daily performance of NVDA. Tracking error can arise from fees, expenses, and the complexities of maintaining the leveraged exposure.

Expense Ratio: 1.15

Average Trading Volume

The ETF's liquidity depends on the trading volume, which can be moderate and may vary significantly based on market interest in NVIDIA.

Bid-Ask Spread

The bid-ask spread reflects the cost of trading the ETF, which can be wider than more liquid ETFs, particularly during volatile periods.

Market Environment Factors

Economic indicators, sector growth prospects for semiconductors, and overall market sentiment towards NVIDIA all impact the ETF's performance.

Growth Trajectory

Growth depends on investor interest in leveraged exposure to NVIDIA and the continued growth and volatility of the semiconductor sector. Changes in investment strategy would be related to adjustments in the financial instruments used to achieve 2x daily leverage.

Competitive Edge

SMCI's competitive edge lies in providing a leveraged exposure to NVIDIA, attracting investors seeking amplified short-term gains or hedging opportunities related to NVIDIA. This ETF offers a convenient way to get a 2x leveraged exposure to NVDA. The ETF specializes on providing short term leverage opportunities and is not meant for long term investments.

Volatility

Volatility is extremely high due to the leveraged nature of the ETF. Daily fluctuations can be significant.

Market Risk

The ETF is subject to market risk associated with NVIDIA, as well as the risks inherent in leveraged investments, including the potential for rapid and substantial losses.

Ideal Investor Profile

The ideal investor is a sophisticated trader with a high-risk tolerance and a short-term investment horizon, seeking to capitalize on short-term movements in NVIDIA's stock price.

Market Risk

This ETF is most suitable for active traders with a deep understanding of leveraged investments and the semiconductor market, rather than long-term investors or passive index followers.

The Defiance Daily Target 2x Long SMCI ETF provides leveraged exposure to NVIDIA, targeting short-term traders with a bullish outlook. Due to its 2x leverage, the ETF carries significant risks and is not suitable for long-term investors. Performance is highly dependent on NVIDIA's daily price movements, and the ETF experiences high volatility. Investors should understand the intricacies of leveraged ETFs before investing in SMCI.

Data Sources:

• Defiance ETFs website
• ETF.com
• Bloomberg
• Morningstar

Disclaimers:

The information provided is for informational purposes only and should not be considered financial advice. Investing in leveraged ETFs carries significant risk, including the potential for substantial losses. Consult with a financial advisor before making any investment decisions.