AXS TSLA Bear Daily ETF (TSLQ)

Overview

The AXS TSLA Bear Daily ETF (TSLQ) is an actively managed ETF that seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of Tesla (TSLA) stock.

Reputation and Reliability

AXS Investments is a relatively newer ETF issuer. Their reputation is building, but their track record is shorter compared to established players.

Management Expertise

The management team has experience in actively managed ETFs and derivatives, which is important for an inverse product.

Goal

To provide daily investment results (before fees and expenses) that correspond to the inverse (-1x) of the daily performance of Tesla (TSLA) stock.

Investment Approach and Strategy

Strategy: The ETF employs a strategy of using swap agreements and other derivatives to achieve its inverse daily performance target relative to TSLA.

Composition The ETF's assets consist primarily of swap agreements, futures contracts, and other derivatives linked to the performance of Tesla stock. It does not directly hold shares of TSLA.

Market Share: TSLQ holds a significant portion of the inverse TSLA single-stock ETF market, although the market itself is relatively niche.

Total Net Assets (AUM): 124000000

Key Competitors

• Direxion Daily TSLA Bear 1X Shares (TSDD)

Competitive Landscape

The competitive landscape is relatively limited, with TSLQ being the dominant player. TSLQ benefits from being among the first movers, while competitors may struggle to gain traction due to the niche nature of the product and path dependency. The primary advantage TSLQ has is the first mover advantage, better market recognition and higher trading volume.

Historical Performance: Historical performance is entirely dependent on the daily price movements of Tesla (TSLA). As an inverse ETF, its performance will be negatively correlated with TSLA's daily returns.

Benchmark Comparison: The ETF's performance should be compared to the inverse daily performance of TSLA. Tracking error may occur due to fees, expenses, and the complexities of derivative instruments.

Expense Ratio: 1.15

Average Trading Volume

The average daily trading volume of TSLQ indicates good liquidity, enabling investors to easily buy and sell shares.

Bid-Ask Spread

The bid-ask spread for TSLQ is typically tight, reflecting the ETF's liquid market and accessibility.

Market Environment Factors

TSLQ's performance is directly influenced by the market sentiment towards Tesla, overall market volatility, and interest rate changes, all of which can impact the pricing of derivatives.

Growth Trajectory

The growth trajectory is tied to investor demand for inverse exposure to TSLA. Increased volatility in TSLA could drive demand for TSLQ.

Competitive Edge

TSLQ benefits from being a prominent and liquid inverse TSLA ETF. It offers a straightforward way for investors to express a short-term bearish view on Tesla without directly shorting the stock. Its primary advantage is its high trading volume, and AUM relative to its direct competitor. The ETF provides a relatively lower barrier to entry for investors looking for this type of investment.

Volatility

TSLQ exhibits high volatility due to its inverse relationship with Tesla, a stock known for its price swings. It is designed for short-term tactical positioning, and its performance can deviate significantly from the inverse of Tesla's over longer periods due to the effects of compounding.

Market Risk

The primary market risk is that Tesla's stock price will increase, leading to losses for TSLQ investors. The use of derivatives also introduces counterparty risk and potential for tracking error.

Ideal Investor Profile

TSLQ is best suited for sophisticated investors with a short-term bearish outlook on Tesla and a strong understanding of leveraged and inverse ETFs.

Market Risk

TSLQ is best for active traders seeking short-term tactical exposure. It is not suitable for long-term investors due to the effects of compounding and the potential for significant losses.

The AXS TSLA Bear Daily ETF (TSLQ) is an actively managed ETF designed to provide daily inverse exposure to Tesla (TSLA). It uses derivatives to achieve its objective, making it a complex product best suited for experienced traders. The ETF offers a convenient way to bet against Tesla's daily performance, but it is important to understand the risks associated with inverse ETFs and the potential for compounding to negatively impact long-term returns. TSLQ is a niche product that meets the investment requirements of very few investors given its concentration risk.

Data Sources:

• AXS Investments website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. Leveraged and inverse ETFs are inherently risky and may not be suitable for all investors.