T-Rex 2X Inverse Tesla Daily Target ETF (TSLZ)

Overview

The T-Rex 2X Inverse Tesla Daily Target ETF (TSLI) seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of Tesla stock. It is designed for aggressive investors seeking short-term exposure to the inverse performance of Tesla (TSLA).

Reputation and Reliability

REX Shares is a relatively new ETF issuer, specializing in leveraged and inverse products. Their reputation is tied to the performance of these niche products.

Management Expertise

REX Shares focuses on complex and leveraged ETFs, indicating specialized management expertise in this area.

Goal

To provide daily investment results, before fees and expenses, corresponding to two times the inverse (-2x) of the daily performance of Tesla stock.

Investment Approach and Strategy

Strategy: This ETF utilizes a leveraged inverse strategy, aiming for -2x the *daily* return of Tesla stock. It rebalances daily, making it unsuitable for long-term holding.

Composition The ETF primarily uses financial instruments such as swap agreements to achieve its leveraged inverse exposure to Tesla stock. It does not directly hold Tesla shares.

Market Share: TSLI has a small market share within the leveraged/inverse ETF market, which itself is a niche segment.

Total Net Assets (AUM): 36450000

Key Competitors

• Direxion Daily TSLA Bull 1.5X Shares (TSLL)
• AXS TSLA Bear Daily ETF (TSLZ)
• GraniteShares 1.25x Long TSLA Daily ETF (TSLY)

Competitive Landscape

The competitive landscape is focused on providing leveraged exposure to Tesla. TSLI's advantage is its 2x inverse exposure, which appeals to investors with a bearish outlook on Tesla. A disadvantage is that leveraged ETFs are prone to volatility decay, especially when held over extended periods. The TSLI market share data, as of October 2024, reflects no relative standing, likely owing to the fact it is a small fund, relative to the market capitalizations it seeks to reflect.

Historical Performance: Historical performance is highly dependent on Tesla's daily stock movements and is subject to volatility decay. Past performance is not indicative of future results.

Benchmark Comparison: The ETF does not track a traditional benchmark index; instead, it aims for a multiple of the inverse of Tesla's daily performance. Benchmarking would involve comparing it to -2x the daily performance of Tesla.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume of TSLI can vary, but it generally exhibits moderate liquidity, sufficient for most retail investors.

Bid-Ask Spread

The bid-ask spread can fluctuate but is generally manageable, though it can widen during periods of high volatility.

Market Environment Factors

TSLI is significantly affected by Tesla's stock performance, investor sentiment towards Tesla, and overall market volatility. Economic factors and news related to Tesla's business also influence its price.

Growth Trajectory

The growth trajectory depends on the demand for leveraged inverse exposure to Tesla. Changes in investor sentiment towards Tesla could significantly impact its AUM.

Competitive Edge

TSLI's competitive edge lies in providing 2x inverse exposure to Tesla, which is unique among ETFs. Its leveraged inverse strategy is suitable for those with a very short term and bearish outlook on Tesla. However, because of volatility decay, it is not suitable for investors looking to hold for more than one day. It caters to short-term traders seeking to profit from anticipated intraday price declines in Tesla stock. The higher leverage also allows for amplified returns (and losses) compared to a 1x inverse ETF.

Volatility

TSLI is extremely volatile due to its leveraged and inverse nature. It is subject to rapid and significant price swings.

Market Risk

The market risk is high due to the concentration in Tesla stock and the use of leverage. Investors are exposed to the risks associated with Tesla's business, including competition, regulatory changes, and technological disruptions.

Ideal Investor Profile

The ideal investor is an experienced, sophisticated trader with a high-risk tolerance and a very short-term (intraday) outlook on Tesla. They must fully understand the risks associated with leveraged and inverse ETFs.

Market Risk

TSLI is suitable only for active traders with a strong understanding of leveraged products. It is not appropriate for long-term investors or those seeking passive index exposure.

The T-Rex 2X Inverse Tesla Daily Target ETF (TSLI) is a leveraged inverse ETF designed for short-term, aggressive trading strategies focused on Tesla. It seeks to deliver two times the inverse of Tesla's daily stock performance before accounting for fees and expenses. It is extremely volatile and is subject to volatility decay, making it unsuitable for long-term holding. This ETF is designed for sophisticated investors with high risk tolerance.

Data Sources:

• REX Shares Website
• ETF.com
• Morningstar
• SEC Filings

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investing in leveraged and inverse ETFs involves significant risks, including the potential loss of principal.