Latest news with #GraniteShares2xLongNVDADailyETF
Yahoo
29-01-2025
- Business
- Yahoo
Wall Street's Levered ETF Boom Is Near-$1 Billion Money Spinner
(Bloomberg) -- A popular ETF trade beloved by market speculators is fast turning into a billion-dollar revenue generator for nimble-footed financial firms. Trump's Federal Funding Pause Threatens State Financials NYC Subway's Most Dangerous Stations Are on Lexington Ave. Line Housing Aid Uncertain After Trump's Spending Freeze Memo Texas HOA Charged With Discrimination for Banning Section 8 Renters Newsom Enlists Magic Johnson, Guggenheim CEO for LA Rebuilding Traders have been diving into leveraged exchange-traded funds, a subset of a derivatives-enhanced products, offering to amp up the daily moves of the world's most popular stocks and indexes. That's enriched the firms behind the majority of these ETFs. They netted around $940 million in revenue in 2024, according to Bloomberg Intelligence, which used napkin math to multiply their assets by their fees. That's a record 37% jump, beating last year's all-time high. The six firms that dominate the arena are: Direxion, ProShares, Tidal Investments, GraniteShares, Tuttle Capital Management and AXS Investments. Leveraged ETFs were in the spotlight on Monday when China's answer to ChatGPT, DeepSeek, sparked a selloff in technology stocks. Stock market heavy-weight Nvidia Corp. saw nearly $600 billion of its market cap wiped out in a single day. As a result, momentum-chasing day traders who pounced on a trio of Nvidia-focused funds collectively saw about $2 billion in value shaved off during the trading session, BI-compiled data show, while the leveraged ETF complex erased around $10 billion as a whole. It could have been a bitter lesson for day traders that embraced the category. Instead, traders plowed another $1 billion into the GraniteShares 2x Long NVDA Daily ETF (ticker NVDL) — its biggest one-day inflow on record — after eight straight days of outflows. That's as the ETF tumbled a record 34% Monday. The influx 'speaks to investors willingness to react and buy the dip even on the most volatile of days,' said Will Rhind, the chief executive officer of GraniteShares. Industry critics have long worried that many investors might not read the fine print and risk losing money in the process. Such products are often meant for active traders who want to bet on and against an asset's performance for no more than a single day, as these funds typically veer off course when tracking shares over a longer period. Technical risks like volatility drag — when big valuation swings diminish returns — and the erosion of net-asset value are not talked about enough when it comes to promoting these products, according Jane Edmondson, head of index product strategy at TMX VettaFi. 'A lot of retail investors do not understand the decay effect tied to daily rebalancing which causes return erosion over time,' she said. 'This side-effect of leverage can cause quite a lot of dispersion relative to the underlying index.' But issuers defend their popularity. As one of the more long-standing firms, Direxion noted it has a dedicated education section on its website, while Tuttle Capital head Matthew Tuttle said such offerings help clients 'manage risks and generate returns.' The data suggest that the majority of the issuers derived 80% or more of their revenue from the complex ETFs, with Direxion as the most reliant. Calculations by BI show that the firm generated $396 million in ETF revenue last year, with a whopping 98.3% coming from its suite of leveraged and inverse ETFs. The high-octane offerings surged in popularity over the past few years, helped by the relentless bull market. The floodgates can be traced back to 2019 when US regulators eased constraints for launching new funds, followed by 2020 when they no longer considered some leveraged ETFs to be 'complex.' 'There are dangers to any products you own. You just have to be aware of what you are holding,' said Mohit Bajaj, director of ETFs at WallachBeth Capital. But 'the leverage ETF issuers have done a great job of fulfilling a demand in the marketplace.' The transition of leveraged ETFs from niche product to the mainstream is clearly a boon for issuers, according to BI analysts Eric Balchunas and Andre Yapp. 'Leveraged ETFs are arguably a good business to be in because there are products for both up and down markets and the big, low-cost issuers don't compete in the category,' they said. It's also a plus that 'the products are agnostic to bull or bear market conditions.' Whether or not these funds are good for risk-seeking investors remains up for debate. Matt Markiewicz of Tradr ETFs acknowledges there's a learning curve with any new product, but 'as investors' palates become more sophisticated and they learn how and why these strategies could be useful, we expect appetite to rapidly grow.' What America's Tech Billionaires Really Bought When They Backed Donald Trump Musk Pitches New Narrative as Tesla Sales Fall Indy Pass, the Anti-Vail Seasonal Ski Ticket, Is Gaining Fans Forget Factories, Small US Towns Want Buc-ee's Gas Stations The CDC Won't Give the Public a Full Picture of Fertility Treatment Risks ©2025 Bloomberg L.P.
Yahoo
28-01-2025
- Business
- Yahoo
Investors bet on Nvidia share recovery with buying of leveraged ETFs
By Suzanne McGee (Reuters) - Short-term traders are proving eager to bet on a rapid recovery in Nvidia, pouring money into the three largest leveraged exchange-traded funds which are linked to gains in the share price of the AI chipmaking giant. Speculators and traders flocked to buy leveraged funds which aim to deliver double the daily return in Nvidia, asset managers said on Tuesday. The company's stock suffered the biggest one-day fall in market capitalization in history on Monday in response to news that China's DeepSeek launched a new artificial intelligence model. "We had about $1 billion of inflows into our long product," said Will Rhind, founder and CEO of GraniteShares, referring to the largest of these funds, the GraniteShares 2x Long NVDA Daily ETF. That wasn't enough to offset the impact of Nvidia's massive selloff on its assets, which shrank to about $4.3 billion from a high north of $6 billion last year. Each of the four Nvidia leveraged long ETFs ended Monday with losses of between 33% and 34%, according to LSEG data. The T-Rex 2x Long Nvidia Daily Target ETF saw inflows of $7.6 million into the $488.4 million fund on Monday, according to Scott Acheychek, the chief operating officer of REX Financial, one of the two firms that created the fund. Its much smaller bearish ETF, which delivers a gain equivalent to any loss in Nvidia's stock price, saw $3.1 million in outflows, the firm said. The Direxion Daily NVDA Bull 2x Shares ETF, which has about $435 million in assets, had $61.4 million in inflows, the firm said. Its corresponding inverse fund also had inflows, of about $3 million. The smallest of the four leveraged Nvidia ETFs, the $3 million Leverage Shares 2x Long NVDA Daily ETF, couldn't immediately provide details of flows into its fund on Monday in dollar terms. But Paul Marino, chief revenue officer of Themes ETFs, which oversees the U.S. business of Leverage Shares, said trading volume was six times average. "That shows you how many speculative traders are involved in Nvidia," Marino said. By the end of the day on Monday, he said flows had turned positive and remained so throughout the day on Tuesday. Sign in to access your portfolio
Reuters
28-01-2025
- Business
- Reuters
Investors bet on Nvidia share recovery with buying of leveraged ETFs
Jan 28 (Reuters) - Short-term traders are proving eager to bet on a rapid recovery in Nvidia (NVDA.O), opens new tab, pouring money into the three largest leveraged exchange-traded funds which are linked to gains in the share price of the AI chipmaking giant. Speculators and traders flocked to buy leveraged funds which aim to deliver double the daily return in Nvidia, asset managers said on Tuesday. The company's stock suffered the biggest one-day fall in market capitalization in history on Monday in response to news that China's DeepSeek launched a new artificial intelligence model. "We had about $1 billion of inflows into our long product," said Will Rhind, founder and CEO of GraniteShares, referring to the largest of these funds, the GraniteShares 2x Long NVDA Daily ETF (NVDL.O), opens new tab. That wasn't enough to offset the impact of Nvidia's massive selloff on its assets, which shrank to about $4.3 billion from a high north of $6 billion last year. Each of the four Nvidia leveraged long ETFs ended Monday with losses of between 33% and 34%, according to LSEG data. The T-Rex 2x Long Nvidia Daily Target ETF (NVDX.Z), opens new tab saw inflows of $7.6 million into the $488.4 million fund on Monday, according to Scott Acheychek, the chief operating officer of REX Financial, one of the two firms that created the fund. Its much smaller bearish ETF, which delivers a gain equivalent to any loss in Nvidia's stock price, saw $3.1 million in outflows, the firm said. The Direxion Daily NVDA Bull 2x Shares ETF (NVDU.O), opens new tab, which has about $435 million in assets, had $61.4 million in inflows, the firm said. Its corresponding inverse fund also had inflows, of about $3 million. The smallest of the four leveraged Nvidia ETFs, the $3 million Leverage Shares 2x Long NVDA Daily ETF (NVDG.O), opens new tab, couldn't immediately provide details of flows into its fund on Monday in dollar terms. But Paul Marino, chief revenue officer of Themes ETFs, which oversees the U.S. business of Leverage Shares, said trading volume was six times average. "That shows you how many speculative traders are involved in Nvidia," Marino said. By the end of the day on Monday, he said flows had turned positive and remained so throughout the day on Tuesday.
Yahoo
28-01-2025
- Business
- Yahoo
NDVL Jumps 24% on $1.5B Nvidia ETF Inflow
The GraniteShares 2x Long NVDA Daily ETF (NVDL) attracted $1.5 billion in new assets, boosting its total assets to nearly $6.5 billion, according to daily flows data. The SPDR Portfolio S&P 500 ETF (SPLG) gathered $386 million in inflows, while the ProShares UltraPro QQQ (TQQQ) added $269 million. The Technology Select Sector SPDR Fund (XLK) pulled in $227 million in new assets. The SPDR S&P 500 ETF Trust (SPY), meanwhile, saw $1.7 billion in outflows, while the Health Care Select Sector SPDR Fund (XLV) experienced $678 million in redemptions, according to the daily fund flow report. Leveraged ETF dominated flows with nearly $1.6 billion in net inflows, while U.S. fixed income funds added $879 million. U.S. equity funds saw redemptions of nearly $1.2 billion. Total ETF industry flows reached $2.68 billion for the day. Top 10 Creations (All ETFs) Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change NVDL GraniteShares 2x Long NVDA Daily ETF 1,529.15 6,487.36 23.57% SPLG SPDR Portfolio S&P 500 ETF 386.24 58,329.94 0.66% TQQQ ProShares UltraPro QQQ 269.05 26,744.59 1.01% XLK Technology Select Sector SPDR Fund 227.40 75,570.38 0.30% TLT iShares 20+ Year Treasury Bond ETF 191.69 52,644.16 0.36% EZU iShares MSCI Eurozone ETF 187.23 7,251.38 2.58% FBTC Fidelity Wise Origin Bitcoin Fund 186.07 22,524.50 0.83% USO United States Oil Fund LP 183.13 1,084.71 16.88% XLF Financial Select Sector SPDR Fund 170.29 51,930.39 0.33% ARKB ARK 21Shares Bitcoin ETF Ben of Int 168.71 5,406.01 3.12%Top 10 Redemptions (All ETFs) Ticker Name Net Flows ($, mm) AUM ($, mm) AUM % Change SPY SPDR S&P 500 ETF Trust -1,732.91 633,870.04 -0.27% XLV Health Care Select Sector SPDR Fund -678.45 38,269.41 -1.77% BSV Vanguard Short-Term Bond ETF -410.06 32,934.79 -1.25% QQQ Invesco QQQ Trust Series I -397.27 331,828.69 -0.12% GLD SPDR Gold Shares -281.88 76,492.12 -0.37% SQQQ ProShares UltraPro Short QQQ -156.44 1,909.92 -8.19% RSP Invesco S&P 500 Equal Weight ETF -140.32 74,586.63 -0.19% CGDV Capital Group Dividend Value ETF -126.67 13,244.97 -0.96% UUP Invesco DB US Dollar Index Bullish Fund -97.83 524.20 -18.66% IWD iShares Russell 1000 Value ETF -96.92 63,181.50 -0.15%ETF Daily Flows By Asset Class Net Flows ($, mm) AUM ($, mm) % of AUM Alternatives -17.45 9,386.76 -0.19% Asset Allocation -4.52 22,323.98 -0.02% Commodities E T Fs -156.94 167,775.68 -0.09% Currency 387.29 140,387.79 0.28% International Equity 787.96 1,594,379.71 0.05% International Fixed Income 644.96 264,242.84 0.24% Inverse -264.31 11,659.22 -2.27% Leveraged 1,585.43 135,326.37 1.17% Us Equity -1,157.22 6,892,452.38 -0.02% Us Fixed Income 879.17 1,561,480.32 0.06% Total: 2,684.38 10,799,415.05 0.02%Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the | © Copyright 2025 All rights reserved Sign in to access your portfolio
Bloomberg
28-01-2025
- Business
- Bloomberg
Tech's Day of Reckoning Spurs Biggest Dip-Buying Rush Since 2021
A punishing selloff in technology stocks on Monday spelled opportunity for dip-buyers prowling in the $11 trillion ETF arena. As the Invesco QQQ Trust Series 1 (ticker QQQ) sank nearly 3% on Monday, spooked by Chinese startup DeepSeek's AI progress, investors poured $4.3 billion into the tech-heavy fund — its biggest one-day haul since 2021. The same impulse drove a record $1 billion into the GraniteShares 2x Long NVDA Daily ETF (NVDL), and almost $1.3 billion into the Direxion Daily Semiconductors Bull 3x Shares (SOXL), Bloomberg data show, despite double-digit plunges in both funds.
