Understanding Tesla Leveraged ETFs and Inverse Investments

If you're considering investing in Tesla, you may have come across leveraged ETFs and inverse investments. Leveraged ETFs use debt to amplify returns, but they can also amplify losses.

Leveraged ETFs can be a powerful tool for investors who want to maximize their returns, but they can also be riskier than traditional investments. For example, the Direxion Daily S&P 500 Bull 3X Shares ETF (SPXL) seeks to provide 300% of the daily performance of the S&P 500 Index.

Inverse investments, on the other hand, aim to profit from a decline in the market. The ProShares Short S&P 500 ETF (SH), for instance, seeks to provide the inverse of the daily performance of the S&P 500 Index.

As we dive into the performance of the Tesla Leveraged ETF, it's essential to understand the numbers behind the fund. The NAV (Net Asset Value) and Market Price information as of 01/13/2025, shows that the 1-month return for TSLLNAV is 30.74%.

The 1-month return for TSLLMarket Close is 30.73%, which is a mere 0.01% difference from TSLLNAV. This slight difference highlights the importance of understanding the nuances of fund pricing.

The expense ratio for both TSLL and TSLS is 0.96% (Gross) and 0.96% (Net), indicating that investors can expect to pay a similar fee for both funds. However, it's worth noting that the Net Expense Ratio for TSLS would be 0.95% if Acquired Fund Fees and Expenses were excluded.

Here's a brief snapshot of the performance of TSLL and TSLS as of 01/13/2025:

Keep in mind that short-term performance is not a reliable indicator of a fund's future performance, and investors should not make investment decisions based solely on returns.

Leveraged ETFs can be a powerful tool for investors, but they come with unique risks and considerations. Short-term performance is not a good indication of a fund's future performance, and an investment should not be made based solely on returns.

The expense ratio is an important factor to consider when investing in leveraged ETFs. For example, the expense ratio for TSLL is 0.96%, which includes management fees, other operating expenses, and Acquired Fund Fees and Expenses.

Investors should also be aware that leveraged ETFs can be subject to substantial short-term changes due to ongoing market volatility. In fact, the NAV for TSLS declined by 17.08% in the last month.

Here are some key facts about leveraged ETFs to keep in mind:

It's also worth noting that the Net Expense Ratio for TSLL would be 0.86% if Acquired Fund Fees and Expenses were excluded. This highlights the importance of carefully reviewing the expense ratio and other fees associated with a leveraged ETF.

The Tesla Leveraged ETF is a high-performing investment option, but it's essential to understand its key characteristics.

The fund's data is presented on a total return basis, which means it includes both capital gains and dividends.

The 1-month return for the TSLR Market Price Return is 30.82%, while the TSLR NAV Return is 30.81%.

The fund's benchmark return for the 1-month period is 17.00%.

Here's a summary of the fund's performance over different time periods:

It's worth noting that the fund's returns are based on the midpoint of the bid/ask spread at 4pm ET, and actual returns may vary depending on the time of trade.

When investing in a Tesla leveraged ETF, it's essential to understand your options.

You can choose from two primary types of leveraged ETFs: 2x and 3x.

A 2x Tesla leveraged ETF aims to double the daily performance of the underlying index, while a 3x ETF seeks to triple it.

Keep in mind that these ETFs use a variety of investment strategies, including futures, options, and swaps, to achieve their leveraged goal.

The Fund Objective is a crucial aspect to consider when investing in a particular fund. It's essentially a promise of what the fund aims to achieve.

The fund in question seeks to replicate the daily performance of Tesla Inc's common stock, but with a twist - it wants to achieve 200% of the daily percentage change. This means if Tesla's stock goes up by 2%, this fund would aim to go up by 400%.

There's no guarantee, however, that the fund will meet its stated objective. It's essential to understand that past performance is not a reliable indicator of future results.

The fund's objective is not a long-term commitment, but rather a daily one. It's not expected to provide 2 times the cumulative return of Tesla's stock for periods greater than a day.

Single Stock Exposure can be a double-edged sword. The Direxion Daily TSLA Bull 2X Shares (TSLL) seeks 200% daily leveraged investment results, which means it will have an increase in volatility relative to the underlying TSLA performance.

This fund is designed to provide 2 times the daily percentage change of Tesla Inc's common stock, but there's no guarantee it will meet its stated objective. The fund should not be expected to provide 2 times the cumulative return of TSLA for periods greater than a day.

As with any investment, it's essential to understand the risks involved. The Direxion Daily TSLA Bull 2X Shares (TSLL) and the Direxion Daily TSLA Bear 1X Shares (TSLS) are both designed to provide daily leveraged investment results, which can increase the impact of compounding on an investor's returns.

Here are some key differences between these two funds:

Understanding the underlying stock is also crucial. Tesla Inc designs, develops, manufactures, leases, and sells electric vehicles, energy generation and storage systems in the United States, China, and internationally.