10-Q/A: Dynamic Shares Trust Amends Quarterly Report to Include Trust-Level Financials

Dynamic Shares Trust files an amendment to its Q1 2023 report to include combined financial information for the Trust and its Dynamic Short Short-Term Volatility Futures ETF.

Summary

• Dynamic Shares Trust has amended its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.
• The amendment includes the combined financial information for the Trust, in addition to the Dynamic Short Short-Term Volatility Futures ETF.
• The original report was filed on May 12, 2023, and this amendment does not update or discuss any developments after that date.
• The Trust's net assets were $2,935,667 as of March 31, 2023, compared to $2,722,929 as of December 31, 2022.
• The net asset value per share was $19.57 as of March 31, 2023, compared to $18.15 as of December 31, 2022.
• The Fund seeks to achieve its investment objective by obtaining investment exposure to an actively managed portfolio of short positions in VIX Futures Contracts.
• The Fund expects that the notional exposure of its portfolio of short positions in VIX Futures Contracts will range from -0.1 to -0.5 under normal circumstances.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the amendment itself isn't inherently positive or negative, the increase in net assets and NAV per share suggests a positive trend. However, the inherent risks associated with volatility-based ETFs temper the overall sentiment.

Positives

• The Fund's net assets increased during the quarter.
• The net asset value per share increased during the quarter.
• The amendment enhances transparency and compliance with SEC regulations.

Risks

• The Fund is subject to correlation and compounding risk, which can cause the Fund's performance to differ from its stated multiple times the return of its benchmark.
• The Fund is exposed to counterparty risk, which is the risk that the counterparty to a contract will not meet its obligations.
• The Fund is subject to leverage risk, which can magnify any losses on investments.
• The Fund is subject to liquidity risk, which is the risk that the Fund may not be able to sell its investments quickly or at a fair price.
• The Fund is subject to contango and backwardation risk, which can have a positive or negative impact on performance.
• The Fund is subject to natural disaster/epidemic risk, which can be highly disruptive to economies and markets.
• The Fund is subject to the risk that current assumptions and expectations could become outdated as a result of global economic shocks.

Future Outlook

The Fund expects that the notional exposure of its portfolio of short positions in VIX Futures Contracts will range from -0.1 to -0.5 under normal circumstances.

Management Comments

• We wish to clarify for our investors and stakeholders that, due to the structure of our organization, these registrant level financial statements are identical to the fund level financial statements of our sole fund, the Dynamic Short Short-Term Volatility Futures ETF.
• It is important to note that the inclusion of these registrant level financial statements does not reflect any changes in the financial condition, results of operations, or cash flows of the Trust or the Fund from those previously reported.
• We remain committed to maintaining the highest standards of financial reporting and transparency.

Industry Context

This report provides insights into the performance and financial condition of a volatility-based ETF, which is a niche segment within the broader ETF market. These funds are often used by sophisticated investors seeking to hedge risk or profit from market volatility.

Comparison to Industry Standards

• It's difficult to compare this fund directly to industry standards without knowing its specific benchmark and investment strategy in detail.
• However, similar volatility ETFs include products from ProShares, VelocityShares, and iPath.
• Performance should be evaluated against these peers, considering factors like expense ratio, tracking error, and exposure to VIX futures contracts.

Stakeholder Impact

• Shareholders will benefit from the increased transparency provided by the amended report.
• Authorized Participants are directly involved in the creation and redemption of shares.
• The Sponsor's reputation is tied to the performance and compliance of the Fund.

Key Dates

Keywords

Volatility Futures, VIX, Dynamic Shares Trust, ETF, Financial Statements, Amendment