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" Tidal files for first leveraged Berkshire Hathaway ETF

The preliminary prospectus for Tidal Trust's Kick BRK 2X Long Daily Target ETF (BRKX) says it will seek "daily leveraged investment results of two times (200%) the daily percentage change in the share price" of Berkshire's Class B shares (BRK.B) using derivatives.



The key word is "daily."



The fund is only trying to double BRK.B's return for a single day. Investors who hold the ETF for more than one day may get a return that is more, or less, than double the return of the stock over the same period.



The more volatile the stock, the greater the disparity.



(Bloomberg's Matt Levine offers an extensive explainer of the risks of leveraged ETFs in his excellent Money Stuff column.)



Hence the warning in the prospectus that "investors should not plan to hold shares of the Fund unmonitored for periods longer than a single trading day."



It also warns the ETF is "designed to be utilized only by sophisticated investors, such as traders and active investors employing dynamic strategies."

(The most recent disclosure of Bank of America stock sales was in early October, so the value of the holding on September 30 will not reveal if Berkshire has continued to sell after its stake fell below 10%, relieving it of the obligation to promptly report additional moves.)



We'll also be looking to see the extent of Berkshire's stock buybacks, which have slowed as its shares have gained, and the size of its cash pile, which was a record $277 billion as of June 30.



Operating earnings, which don't include paper gains or losses on its equity holdings, are expected to drop 1% to $10.5 billion according to the FactSet consensus, in part due to insurance losses from Hurricane Helene and other storms."


https://mail.yahoo.com/d/folders/1/messages/12337

The fund is only trying to double BRK.B's return for a single day. Investors who hold the ETF for more than one day may get a return that is more, or less, than double the return of the stock over the same period.
...
Hence the warning in the prospectus that "investors should not plan to hold shares of the Fund unmonitored for periods longer than a single trading day."
...
"designed to be utilized only by sophisticated investors, such as traders and active investors employing dynamic strategies."

Yet there is this: https://testfol.io/?d=eJy9j7FOxEAMRP%2FF9RahodgaUR...

Of course, it helps that this period was a long bull market.

B&H 2X & 3X daily QQQ, 2010 - 2024

Name      CAGR      Max Drawdown        Volatility          
QQQ       18.87%    -35.12%             20.45%    
QLD       32.22%    -63.68%             40.83%    
TQQQ      41.74%    -81.66%             60.53%    

For a $10,000 initial investment:

Name      Ending Value
QQQ        $127,374
QLD        $610,712
TQQQ     $1,698,514

In the words of my wife's best friend: "It's a great life if you don't weaken."

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