Leveraged Tesla, Apple funds among new single-stock ETFs
$Tesla(TSLA.US$ and $Apple(AAPL.US$ investors are about to get more ETFs that amplify bets on the companies, among a number of single-stock products entering the market this week.
Direxion and GraniteShares are each launching four exchange-traded funds that allow investors to make leveraged or inverse bets on the daily performance of individual companies. They are both starting leveraged and inverse Tesla funds as well as leveraged Apple products. Direxion is also introducing an inverse Apple fund, while GraniteShares is debuting a leveraged $Coinbase(COIN.US$ ETF.
The first single-stock products in the US were launched by AXS Investments last month, even as regulators warned of their risks to investors and markets. Many of those ETFs from AXS Investments track retail favorites like $Tesla(TSLA.US$, $NVIDIA(NVDA.US$, and $PayPal(PYPL.US$ -- stocks that grew in popularity during the pandemic but have since suffered steep losses during the market downturn.
Among the eight single-stock ETFs that AXS has launched, its inverse Tesla fund has received the most inflows and trading volume, once again showing the popularity of Tesla-linked products.
David Mazza, head of product at Direxion, said the firm has been educating retail traders about its complex products. "We really emphasize through our educational efforts that these products are not to be used as long-term investments. In fact, quite the opposite -- these funds are daily trading tools," he said.
Will Rhind, chief executive officer at GraniteShares, also said a single-stock ETF is not for every investor. "It's a product for people that understand the risks, understand how leverage works, understand how daily rebalancing works and people that are able to monitor their portfolios actively," he said.
Source: Bloomberg
Disclaimer: Past performance can't guarantee future results. Investing involves risk and the potential to lose principal. This article is for information and illustrative purposes only.
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witty Crane_2487 : Am I reading that these have a Gross Expense Ratio of .99% (DIREXION) and 1.18% (GRANITE)?
Newbee4 : .