ETF Education Report: MSDD

What this ETF is trying to do

The GRANITESHARES 2X SHORT MSTR DAILY ETF (MSDD) is an exchange-traded fund listed on the NASDAQ. Based on its name, this type of fund is designed to move in the opposite direction of a specific underlying asset. It uses leverage to try to achieve double the inverse movement of that asset on a daily basis.

What the numbers show

The current price of MSDD is $47.88. When looking at how the share price has changed, we see two different stories depending on the time frame:

• One-Year Price Return: The share price has increased by approximately 77.74% over the last year. To understand this, we can look at an estimated price from roughly one year ago, which was about $26.93. If you had invested $10,000 into this ETF one year ago, your investment would have grown to approximately $17,774 based on the share-price change alone (before any distributions).

• Year-to-Date (YTD) Price Return: So far this year, the share price has declined by approximately 48.72%.

The supplied total return data for both YTD and one-year periods matches the price return figures exactly. This means the total return reflects only the movement of the share price.

Income and distribution explanation

Some investors look for ETFs that pay out cash regularly, known as distributions. For MSDD, the distribution yield is 0%. No distributions were detected over the last 12 months. Because there are no payouts, this ETF does not currently provide cash income to investors.

NAV erosion explanation

"NAV" stands for Net Asset Value, which is the actual value of the assets held by the fund. "NAV erosion" happens when the value of those underlying assets drops significantly over time.

For this ETF, the erosion-risk score is 100, and the label is "No price erosion detected." The erosion severity is described as "good," and there is no severe erosion-risk flag. This means that, based on the current measurements, the fund is not showing signs of the specific type of price deterioration associated with high erosion risk.

Pros

• The ETF has shown a strong one-year price return of approximately 77.74%.

Cons

• The ETF has experienced a significant year-to-date share-price decline of approximately 48.72%.

• There are no distributions or cash payouts for investors seeking income.

Beginner takeaway

When looking at an ETF, it is important to look at both the price return and the total return. The price return only tells you how much the share price moved, while the total return includes any cash distributions you might have received. In this case, they are the same because there were no distributions. Always remember that a high share price increase in the past does not guarantee future results, and a falling share price can impact your initial investment.