Defiance Daily Target 2X Long LLY ETF (LLYX)

Overview

The Defiance Daily Target 2X Long LLY ETF (the Fund) seeks to provide daily investment results that, before fees and expenses, correspond to two times (2X) the daily performance of the Nasdaq Biotechnology Index (NBI) as it relates to Eli Lilly and Company (LLY). It is a leveraged ETF, aiming for amplified returns (and amplified losses) on a daily basis. It does not aim to provide long-term investment results.

Reputation and Reliability

Defiance ETFs is a relatively newer entrant in the ETF space, focusing on innovative and thematic ETFs. Their reputation is still developing, and reliability is assessed through their operational execution and product performance over time.

Management Expertise

Information on the specific management team's expertise for this particular ETF is not readily available in public domain, but Defiance ETFs as a company aims to leverage expertise in thematic investing and active management strategies.

Goal

To deliver daily investment results that are twice the daily performance of Eli Lilly and Company's stock price, before fees and expenses.

Investment Approach and Strategy

Strategy: The ETF employs a leveraged strategy, using financial derivatives and other instruments to achieve its 2X daily return objective. It is not designed to track an index over longer periods but rather to achieve its leverage target on a daily basis.

Composition The ETF's performance is directly tied to Eli Lilly and Company (LLY) stock. It does not hold a diversified basket of assets but rather aims to synthetically replicate a leveraged exposure to LLY's daily price movements.

Market Share: As a highly specialized, leveraged ETF focused on a single stock's daily performance, its market share within the broader ETF universe is negligible. Its niche targets active traders seeking short-term, amplified exposure.

Total Net Assets (AUM): 55600000

Key Competitors

• Direxion Daily Pharmaceutical & Biotech Bull 2X Shares ETF (LABU)

Competitive Landscape

The competitive landscape for leveraged single-stock ETFs is limited due to their inherent risks and specific use cases. Defiance Daily Target 2X Long LLY ETF's advantage lies in its direct focus on LLY, offering a concentrated, amplified bet. However, its disadvantages include extreme volatility, high tracking error over longer periods, and the risk of significant capital loss, making it unsuitable for most investors compared to broader biotech or pharmaceutical ETFs.

Historical Performance: Due to its leveraged nature and daily reset, long-term historical performance is not a meaningful metric for this ETF. Performance is highly volatile and subject to daily fluctuations.

Benchmark Comparison: The ETF's objective is to achieve 2X the daily return of LLY. Benchmarking against broad market indices is not appropriate. Performance is measured against its own daily leverage target.

Expense Ratio: 0.0095

Average Trading Volume

The ETF exhibits moderate average daily trading volume, suggesting it is reasonably liquid for active traders within its specific niche.

Bid-Ask Spread

The bid-ask spread for this ETF can vary, but it is generally wider than for highly liquid broad-market ETFs, reflecting its specialized nature and the costs associated with leveraged instruments.

Market Environment Factors

The ETF's performance is heavily influenced by news, clinical trial results, regulatory approvals, and competitive landscape surrounding Eli Lilly and Company (LLY). Broader biotechnology sector trends and overall market sentiment towards healthcare also play a role.

Growth Trajectory

As a daily leveraged ETF, its 'growth' is not about increasing assets under management or expanding holdings in a traditional sense, but rather about its daily price movement relative to LLY. Its strategy remains fixed on achieving the 2X daily return objective.

Competitive Edge

The ETF's primary competitive edge is its direct and amplified exposure to the daily price movements of a single, prominent biotechnology stock (Eli Lilly and Company). This offers active traders a highly concentrated tool for short-term directional bets on LLY's performance, differentiating it from broader sector ETFs or unleveraged single-stock investments. Its specialized nature caters to a specific, albeit small, segment of the market seeking magnified short-term gains. However, this also comes with significant risk, making its 'advantage' primarily for a very defined user group.

Volatility

The ETF is inherently highly volatile due to its 2X leveraged nature. Daily price swings can be substantial, and compounding effects can lead to significant divergence from the underlying asset's performance over periods longer than one day.

Market Risk

The primary market risk is the price decline of Eli Lilly and Company (LLY) stock. Additionally, there are risks associated with the use of derivatives, counterparty risk, and the potential for significant losses due to the daily reset mechanism of leveraged ETFs, especially in volatile markets or during extended sideways price movements.

Ideal Investor Profile

Sophisticated investors and active traders with a high-risk tolerance, a strong conviction on short-term price movements of Eli Lilly and Company (LLY), and a deep understanding of leveraged and inverse ETF mechanics. It is not suitable for buy-and-hold investors or those seeking capital preservation.

Market Risk

This ETF is best suited for active traders with a very short-term investment horizon (intraday to a few days at most). It is not suitable for long-term investors or passive index followers.

The Defiance Daily Target 2X Long LLY ETF offers amplified daily returns linked to Eli Lilly and Company's stock performance. Its leveraged strategy makes it highly volatile and best suited for short-term, active traders with a high-risk tolerance. It does not aim for long-term investment results and carries significant risks, including potential for substantial capital loss. Its expense ratio is 0.95%.

Data Sources:

• Defiance ETFs Official Website
• Financial Data Providers (e.g., Bloomberg, Refinitiv)

Disclaimers:

This information is for informational purposes only and should not be considered investment advice. Leveraged ETFs are complex and carry a high level of risk. Investors should consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Data may be subject to change.