AdvisorShares MSOS Daily Leveraged ETF (MSOX)

As a hedge fund PM reviewing the recent NAV restatement for MSOX, the administrative failure by the Fund Administrator regarding total return swap income accruals from December 2025 to February 2026 is concerning. While the adjustments to figures like December 22, 2025 (adjusted from 4.18133 to 4.15513) are relatively minor, any operational miscalculation in a leveraged product warrants heightened scrutiny on back-office counterparty controls.

From a risk manager's perspective, anyone evaluating MSOX must understand that the fund relies heavily on total return swaps to achieve its daily investment results. The recent March 2026 press release regarding corrected income accrual accounting underscores that fund expenses, assets under management, and counterparty limitations can materially affect daily target tracking.

On our options desk, trading MSOX requires constant vigilance regarding the 2x daily leverage target versus long-term holding periods. As outlined in the summary prospectus, compounding and high market volatility mean performance over multi-day periods will very likely diverge from 200% of the US Cannabis ETF (MSOS). We are pricing options carefully around these mechanics.

Looking at the quantitative structure of MSOX, the fund trades on NYSE Arca with an inception date of August 23, 2022, and uses CUSIP 00768Y289. Given its current NAV levels floating around recent market prints (such as $1.92 in March 2026 and shifting through July 2026), daily rebalancing decay remains the primary headwind for long-term holders.

As a bio-analyst tracking the broader regulatory landscape, MSOX provides a pure-play vehicle capitalizing on the U.S. cannabis market remaining the largest in the world despite limited legal availability. However, investors need to be cognizant that the fund explicitly warns that if they are unsure about volatility and compounding, the product may not be suitable for them.

On our risk management committee, we emphasize that MSOX is strictly designed for sophisticated investors. The fact that the Fund Administrator failed to correctly account for income accruals on total return swaps across a six-week span introduces an unexpected administrative risk factor that quantitative models must now incorporate into compliance checks.