FNGU: Derisking May Impact This Fund

seekingalpha09-05

Klaus Vedfelt MicroSectors™ FANG+™ Index 3X Leveraged ETN (NYSEARCA:FNGU) is a concentrated leveraged portfolio consisting of some top tech names in the NASDAQ (QQQ). FNGU was brought to the market on...

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FNGU was brought to the market on...</p>\n\n<a href=\"https://seekingalpha.com/article/4719077-fngu-derisking-may-impact-this-fund\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>FNGU: Derisking May Impact This Fund</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFNGU: Derisking May Impact This Fund\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-05 07:13 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4719077-fngu-derisking-may-impact-this-fund><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Klaus Vedfelt MicroSectors™ FANG+™ Index 3X Leveraged ETN (NYSEARCA:FNGU) is a concentrated leveraged portfolio consisting of some top tech names in the NASDAQ (QQQ). FNGU was brought to the market on...</p>\n\n<a href=\"https://seekingalpha.com/article/4719077-fngu-derisking-may-impact-this-fund\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1720051108.HKD","symbol_name":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4719077-fngu-derisking-may-impact-this-fund","article_id":"2465551261","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1823934800/image_1823934800.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2465551261","pubTimestamp":1725491589,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Klaus Vedfelt MicroSectors FANG+ Index 3X Leveraged ETN (NYSEARCA:FNGU) is a concentrated leveraged portfolio consisting of some top tech names in the NASDAQ (QQQ). FNGU was brought to the market on J","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","NVDA":"英伟达","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","NFLX":"奈飞","AVGO":"博通","LU0234570918.USD":"高盛全球核心股票组合Acc Close","BK4532":"文艺复兴科技持仓","SNOW":"Snowflake","LU0056508442.USD":"贝莱德世界科技基金A2","IE00BN8TJ469.HKD":"FTGF CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A\" (HKD) INC","LU0080751232.USD":"富达环球多元动力基金A","IE00BZ199S13.USD":"BNY MELLON MOBILITY INNOVATION \"B\" (USD) ACC","L":"洛斯公司","3NVD.UK":"LS 3X NVIDIA","FNGU":"MicroSectors FANG+ 指数每日三倍做多 ETN","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","BK4525":"远程办公概念","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","BK4524":"宅经济概念","SG9999004303.SGD":"Nikko AM Shenton Global Opportunities SGD","2NVD.UK":"2X NVIDIA ETP","LU0820562030.AUD":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC","BK4543":"AI","TTTN":"老虎中美互联网巨头ETF","BK4527":"明星科技股","IE0005OL40V9.USD":"JANUS HENDERSON BALANCED \"A6M\" (USD) INC","SG9999015945.SGD":"LionGlobal Disruptive Innovation Fund A SGD","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","BK4579":"人工智能","LU1145028129.USD":"ALLIANZ INCOME AND GROWTH \"AQ\" (USD) INC","BK4503":"景林资产持仓","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","BK4574":"无人驾驶","LU0345769128.USD":"NINETY ONE GSF GLOBAL EQUITY \"A\" (USD) ACC","LU0861579265.USD":"联博低波幅策略股票基金A","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU0444971666.USD":"天利全球科技基金","BK4505":"高瓴资本持仓","BK4581":"高盛持仓","LU0345769631.USD":"NINETY ONE GSF GLOBAL EQUITY \"A\" (USD) INC","BK4504":"桥水持仓","IE00B3SWFQ91.USD":"PIMCO BALANCED INCOME AND GROWTH \"E\" (USD) INC","LU2602419157.SGD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"AC\" (SGD) ACC","LU0077335932.USD":"FIDELITY AMERICAN GROWTH \"A\" INC","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus"},"translate_title":"FNGU：去风险可能会影响该基金","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NVDA":1,"FNGU":1,"SNOW":0.9,"NFLX":0.8,"AVGO":0.7,"TTTN":0.67,"L":0.6,"3NVD.UK":0.6,"2NVD.UK":0.6},"content_text":"Klaus Vedfelt MicroSectors™ FANG+™ Index 3X Leveraged ETN (NYSEARCA:FNGU) is a concentrated leveraged portfolio consisting of some top tech names in the NASDAQ (QQQ). FNGU was brought to the market on January 22, 2018, and has a maturity date of January 8, 2038. This portfolio targets 3x daily returns over the basket of tech stocks with a daily reset. Given the recent investor sentiment towards tech names after reporting CYq2’24 earnings, I believe that the portfolio may reflect a downtrend going forward, resulting in a cascading effect in the leveraged portfolio. Given this factor, I am recommending FNGU with a SELL rating. Portfolio Mechanics FNGU is a 3x leveraged portfolio that seeks to return holders of the ETN 3x the expected returns on a daily basis of the underlying portfolio as it pertains to its respective weightings of the underlying assets. Given the daily reset, the ETN is meant to be held for a day in order to achieve the 3x target. Any holding period beyond a single day may result in a compounding effect, depending on the direction of the portfolio, that may result in excess returns or excess losses beyond the 3x target. This factor is achieved through the use of borrowed funds swapped for a financing fee in order to achieve the applicable amount of leverage necessary to earn 3x the return on the underlying assets. Because of the daily reset, the fund should not be held for any longer than a single day. If the notes are held for an extended period of time, a compounding effect may occur that can amplify gains or losses, resulting in a mismatch between the fund’s initiatives and actual results. Returns can also be impacted during times of high volatility, resulting in the notes not fully reflecting the 3x target. The chart below demonstrates the compounding effect over a long period of time.   TradingView It’s clear that a long period of a bullish run can achieve outstanding returns for holders of the notes, assuming the trend maintains with minimal consecutive days of decline. Looking at the ETN during a declining period, the portfolio’s declining returns compound to the downside as the underlying stocks realize this effect.   TradingView And finally, looking at FNGU for a single day, the ETN appears to achieve the 3x return of the cohort of stocks held in the portfolio.   TradingView Given these factors, it is imperative that investors understand the underlying risks involved in holding a leveraged ETN prior to investing. As a result of the reset factor, leveraged products are not meant to be used for buy-and-hold strategies and should only be considered for daily trading activity. This makes the ETN less viable as an investment from a financial advisor’s perspective, given the daily risks involved in holding such a strategy. This investment may be more practical for day traders or those working in a hedge fund-like function where the sole purpose is to maximize returns on a daily basis. The portfolio is benchmarked to the NYSE FANG+ Index that consists of 10 constituents, consisting of names like Amazon.com, Inc. (AMZN), Snowflake Inc. (SNOW), Microsoft Corporation (MSFT), Tesla, Inc. (TSLA), and NVIDIA Corporation (NVDA), amongst others.   Corporate Reports Market Risks That May Impact The Underlying Assets CYq2’24 has resulted in some interesting impacts on the equities held within the portfolio, particularly NVIDIA Corporation’s (NVDA) recent earnings release. Despite the upbeat earnings release, investors turned bearish on the name post-earnings. Though I forecasted a strong earnings release for Nvidia, the stock performance post-earnings caught me by surprise. I still remain long-term bullish on the name, given the strong demand for their H100 chips and their 1-year upgrade cycle. Snowflake Inc. (SNOW) plays a major offsetting role in the portfolio as the company has been undergoing operational challenges in the last year. Much of this is driven by new management, a changing restructuring strategy, and consolidation and removal of non-core software platform offerings. I have been covering Snowflake for some time and have remained bearish on the name since its initiation. I do believe that the company will emerge on top as the company’s platform is the best in class for game developers; however, the firm has some operational hurdles to break through before returning to growth. Netflix, Inc. (NFLX), on the other hand, has been substantially positive as the firm reshapes their subscription model, entering into the advertisement realm with a proprietary marketplace for advertisers. The company is entrenching itself into a tiered model, offering an array of subscriptions from premium to ad-supported subscriptions. I remain bullish on Netflix as their tiered business model allows for more viewer reach across multiple regions. Broadcom Inc. (AVGO) is well-positioned for growth as the virtual server and networking chip company continues to entrench itself across the data center. Despite the firm being one of many AI names, Broadcom’s acquisition of VMware pushed the company deeper into general compute and overall data center operations. Conclusion  FNGU is a 3x leveraged ETN that targets a daily return of 3x above the FANG+ asset cohort. The ETN is meant to be actively traded in order to achieve the 3x return target. Longer holding periods may result in a compounding effect that may result in abnormal returns to the upside or downside that may not mirror the 3x initiative. I do not recommend this portfolio to be held by those seeking a buy-and-hold strategy as a result of this. Given the overall sentiment towards the tech industry, I recommend FNGU with a SELL rating.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2465551261"}