ETF Education Report: TSMG

What this ETF is trying to do

The Leverage Shares 2X Long TSM Daily ETF (TSMG) is a leveraged ETF. This means it is designed to aim for more movement than the underlying assets it tracks. It is not an inverse ETF, so it does not bet against the market; instead, it seeks to amplify gains.

What the numbers show

The current price of TSMG is approximately $49.39. Looking at the past year, we can see how the share price has moved:

• Year-to-Date (YTD) Price Return: The share price has increased by approximately 108.02%.

• One-Year Price Return: The share price has increased by approximately 90.70%.

• One-Year Total Return: This figure, which includes distributions, is approximately 113.18%.

It is important to know that "price return" only tracks the change in the share price. "Total return" is a different measurement that includes both the price change and any cash distributions paid out to investors.

To visualize this, if you had invested in the share price roughly one year ago when it was an estimated $25.90, a $10,000 investment would have grown significantly based on the one-year price return.

Income and distribution explanation

TSMG has a distribution yield of approximately 5.52%. This represents the cash distributions relative to the ETF price. The trailing distributions were approximately $2.73.

The data shows that the distribution frequency is "irregular" or "less frequent," with only one payout recorded in the last 12 months. While some investors look for high yields to provide cash income, it is important to remember that a high yield does not guarantee the investment will grow in value.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases over time. StockValueFinder uses an "erosion score" to measure this risk. For TSMG, the erosion score is 100, which is labeled as "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF has shown strong positive price returns both year-to-date and over the last year.

• The total return for the past year has been higher than the price return alone.

Cons

• This is a leveraged ETF, which typically involves higher risk and more intense price swings.

• Distributions are irregular and do not happen on a set schedule.

Beginner takeaway

TSMG is a leveraged product that has seen significant price increases recently. When looking at this ETF, it is important to distinguish between the share-price movement (price return) and the total return (which includes cash payments). Always remember that high distributions are separate from the growth of your initial investment.