Defiance Daily Target 2X Short SMCI ETF (SMCZ)

Overview

The Defiance Daily Target 2x Short SMCI ETF (SMDD) seeks daily investment results, before fees and expenses, corresponding to two times (2x) the inverse (opposite) of the daily performance of shares of NVIDIA. It provides leveraged short exposure to SMCI (Super Micro Computer, Inc.).

Reputation and Reliability

Defiance ETFs is a newer issuer focusing on thematic ETFs. Their reputation is still developing, and reliability depends on their consistent tracking of leveraged inverse benchmarks.

Management Expertise

The management team focuses on innovative ETF strategies, but their expertise in managing leveraged inverse products targeting single stocks should be carefully evaluated.

Goal

To achieve daily investment results, before fees and expenses, corresponding to two times (2x) the inverse (opposite) of the daily performance of SMCI.

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy to deliver twice the inverse of SMCI's daily performance. This is achieved through derivatives and other financial instruments.

Composition The ETF primarily holds financial instruments designed to create leveraged inverse exposure to SMCI, such as swap agreements.

Market Share: Data unavailable. AUM is low.

Total Net Assets (AUM): 12713775

Key Competitors

• None. This is a unique product.
• SDOW

Competitive Landscape

SMDD is a highly specialized product. Its advantage is focused leveraged inverse exposure to SMCI. The disadvantage is the inherent risk and complexity of leveraged inverse ETFs, especially with daily resets. Competitors include broad market leveraged inverse ETFs or other single-stock leveraged inverse products.

Historical Performance: Historical performance data is highly dependent on SMCI's performance and the effects of daily compounding. Due to the nature of the ETF, performance will be volatile and is not suitable for long-term investment.

Benchmark Comparison: The ETF's performance aims to be -2x the *daily* performance of SMCI, making direct long-term benchmark comparisons misleading due to compounding effects.

Expense Ratio: 1.61

Average Trading Volume

The ETF's average trading volume can vary but is usually moderate; investors should assess recent activity before trading.

Bid-Ask Spread

The bid-ask spread can be wide due to the leveraged nature and focused exposure, increasing trading costs.

Market Environment Factors

SMDD's performance is directly linked to SMCI's stock price, which is influenced by the semiconductor industry, technology sector trends, and overall market sentiment. Economic indicators have an indirect effect.

Growth Trajectory

The ETF's growth trajectory depends on the demand for leveraged inverse exposure to SMCI. Changes in SMCI's volatility and investor sentiment will significantly impact its AUM.

Competitive Edge

SMDD's competitive edge lies in providing a readily accessible, leveraged inverse exposure to SMCI. This offers investors a tool to express short-term bearish views or hedge existing positions in SMCI. The ETF's niche focus and leveraged structure differentiate it from broader market inverse ETFs. However, its high risk and complexity limit its appeal to experienced traders.

Volatility

The ETF is highly volatile due to its leveraged inverse structure and the inherent volatility of SMCI. Daily resets can lead to significant deviations from the expected inverse return over longer periods.

Market Risk

The ETF is exposed to the market risk of SMCI and the technology sector. It is also subject to the risks of leveraged investing, including potential for magnified losses and erosion of principal due to daily compounding.

Ideal Investor Profile

The ideal investor is an experienced trader with a short-term bearish outlook on SMCI and a strong understanding of leveraged inverse ETFs.

Market Risk

This ETF is suitable for active traders seeking short-term tactical positions. It is not appropriate for long-term investors or passive index followers due to the inherent risks of leveraged inverse products.

SMDD is a leveraged inverse ETF designed to deliver twice the inverse of SMCI's daily performance. It's a high-risk, high-reward product suitable for experienced traders with a short-term bearish view on SMCI. Due to the effects of compounding, its performance over longer periods can deviate significantly from the expected inverse return. This ETF is not suitable for long-term investment strategies.

Data Sources:

• Defiance ETFs Website
• SEC Filings
• Financial News Outlets

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Leveraged and inverse ETFs are complex financial instruments and involve a high degree of risk.