T-REX 2X Long Tesla Daily Target ETF (TSLT)

Overview

The T-REX 2X Long Tesla Daily Target ETF (TSLT) seeks to provide 2x the daily performance of Tesla (TSLA) stock. It is a leveraged ETF focused on the technology sector, specifically the performance of a single company, and aims to amplify daily gains but also losses.

Reputation and Reliability

REX Shares is a smaller ETF issuer known for its leveraged and inverse products. The firm is considered to have a mixed reputation, as leveraged ETFs can be risky and are not suitable for all investors.

Management Expertise

The management team at REX Shares has experience in creating and managing leveraged ETFs, requiring a good understanding of derivatives and market dynamics.

Goal

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

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy using derivatives to achieve 2x exposure to Tesla's daily performance.

Composition The ETF's assets primarily consist of financial instruments (derivatives like swaps and futures) designed to replicate twice the daily return of Tesla stock. It is not a traditional equity fund holding physical TSLA shares.

Market Share: Due to its niche focus and leveraged nature, TSLT's market share within the broader leveraged ETF space is relatively small.

Total Net Assets (AUM): 49660813

Key Competitors

• Direxion Daily TSLA Bull 2X Shares (TSLL)

Competitive Landscape

The leveraged ETF market is competitive, with a few key players dominating. TSLT faces stiff competition from larger funds like TSLL. TSLT's disadvantage lies in its relatively smaller AUM and lower trading volume compared to TSLL, potentially impacting liquidity and tracking efficiency. TSLL benefits from greater recognition and a broader investor base. Both attempt the same thing, so brand recognition is critical.

Historical Performance: Highly volatile; dependent on Tesla's daily performance. Leveraged ETFs amplify both gains and losses, making historical performance a poor predictor of future returns.

Benchmark Comparison: The ETF aims to achieve 2x the daily return of TSLA. However, due to compounding effects and fees, the ETF's long-term performance can deviate significantly from 2x TSLA's performance.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume of TSLT is moderate, which can impact the ease of buying and selling shares, but has been decreasing recently due to lack of investor interest.

Bid-Ask Spread

The bid-ask spread can vary depending on market conditions and trading volume but tends to be relatively high due to the leveraged nature.

Market Environment Factors

Tesla's stock performance is highly sensitive to news, technological advancements, regulatory changes, and overall market sentiment. Economic indicators and investor risk appetite also play a role.

Growth Trajectory

The growth of TSLT is directly tied to the popularity and performance of Tesla stock. Changes in investor sentiment towards Tesla and its industry can greatly affect the ETF.

Competitive Edge

TSLT's competitive edge is limited due to the presence of similar, more established leveraged ETFs focusing on Tesla. Its success hinges on attracting investors specifically seeking a REX Shares product. It offers a straightforward way to gain leveraged exposure to Tesla's daily price movements. The ETF may appeal to traders familiar with REX Shares products or seeking a slightly different risk/reward profile. However, it lacks the scale and liquidity advantages of its primary competitor.

Volatility

Extremely high due to the 2x leverage and the volatility inherent in Tesla's stock. Substantial daily fluctuations are common.

Market Risk

High market risk tied to Tesla's performance, sector risks affecting the electric vehicle industry, and the risk of leveraged strategies amplifying losses. Compounding effects can also erode returns over longer periods.

Ideal Investor Profile

Experienced traders with a high-risk tolerance who actively monitor Tesla's stock and understand the complexities of leveraged ETFs. Not suitable for long-term investors.

Market Risk

Best suited for active traders seeking short-term, tactical exposure to Tesla. Unsuitable for passive investors or those with a low-risk tolerance.

TSLT is a leveraged ETF designed to provide twice the daily return of Tesla stock. It is a high-risk, high-reward investment best suited for experienced traders with a short-term focus. Due to compounding and fees, long-term performance can deviate significantly from the stated objective. TSLT faces strong competition and has a smaller AUM than its main competitor, resulting in relatively less trading volume. Investors should carefully consider their risk tolerance and investment goals before investing in TSLT.

Data Sources:

• REX Shares website
• ETF.com
• SEC filings

Disclaimers:

The information provided is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risk, including the potential loss of principal. Leveraged ETFs are not suitable for all investors.