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Direxion has launched two new ETFs tied to the price movement in shares of Nvidia CorpNVDA, the financial products provider said on Sep 13, 2023, looking to tap euphoria over developments in artificial intelligence that helped boost stocks this year.
Single-Stock ETFs are fundamentally a new type of funds that look to track the performance of a single company’s stock. While traditional ETFs follow a basket of multiple stocks or other assets to lower concentration risk, Single-Stock ETFs bet on a single entity. This basically allows investors buy shares of an ETF that imitate the performance of an individual company's equity, rather than a diversified portfolio.
Inside NVDU & NVDD
The Direxion Daily NVDA Bull 1.5x Shares ETF (NVDU) seeks to deliver 1.5 times the price return of daily moves in Nvidia’s shares, which have more than tripled year-to-date. Meanwhile, the Direxion Daily NVDD Bear 1x Shares ETF (NVDD) allows bearish investors to earn profits when Nvidia’s shares decline.
How Does It Fit In a Portfolio?
Case for NVDU Investing
Nvidia stock has been a big beneficiary of the AI boom this year. The company is ready to harness the potential of a $600 billion market. With sustainability in mind and a track record of innovation, Nvidia's vision for accelerated computing promises a brighter future powered by AI-driven technology.
Nvidia exec Manuvir Das recently presented some interesting numbers on the market for AI technology, as quoted on Yahoo Finance. Manuvir Das pointed out that the industry is still in its early stages when it comes to accelerated computing (read: Guide to Artificial Intelligence ETFs).
Case for NVDD Investing
Critics are also there in the market who believes that the AI boom will likely take time to materialize. Morgan Staley’s Wilson suggests that the benefits of huge investments toward AI may not be evenly distributed across the corporate landscape, potentially leaving many companies with disappointing returns on their AI spending, per Business Insider article, as quoted on Yahoo Finance. Hence, investors also need to ready for any sudden market crash.
Is There Any Competition?
At present, there are two leveraged ETFs on Nvidia – one is bull and the other is bear. These ETFs are Graniteshares NVDA 1.5X Daily ETF (NVDL - Free Report) and AXS 1.25x NVDA Bear Daily ETF (NVDS - Free Report) . NVDL charges 115 bps in fees and has garnered about $228.1 million in assets. Meanwhile, NVDS has an asset base of $108.1 million. The expense ratio of NVDS is 1.15% (read: Guide to Single-Stock ETF Investing).
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Inside Newly-Launched NVIDIA Bull and Bear ETFs
Direxion has launched two new ETFs tied to the price movement in shares of Nvidia Corp NVDA, the financial products provider said on Sep 13, 2023, looking to tap euphoria over developments in artificial intelligence that helped boost stocks this year.
Single-Stock ETFs are fundamentally a new type of funds that look to track the performance of a single company’s stock. While traditional ETFs follow a basket of multiple stocks or other assets to lower concentration risk, Single-Stock ETFs bet on a single entity. This basically allows investors buy shares of an ETF that imitate the performance of an individual company's equity, rather than a diversified portfolio.
Inside NVDU & NVDD
The Direxion Daily NVDA Bull 1.5x Shares ETF (NVDU) seeks to deliver 1.5 times the price return of daily moves in Nvidia’s shares, which have more than tripled year-to-date. Meanwhile, the Direxion Daily NVDD Bear 1x Shares ETF (NVDD) allows bearish investors to earn profits when Nvidia’s shares decline.
How Does It Fit In a Portfolio?
Case for NVDU Investing
Nvidia stock has been a big beneficiary of the AI boom this year. The company is ready to harness the potential of a $600 billion market. With sustainability in mind and a track record of innovation, Nvidia's vision for accelerated computing promises a brighter future powered by AI-driven technology.
Nvidia exec Manuvir Das recently presented some interesting numbers on the market for AI technology, as quoted on Yahoo Finance. Manuvir Das pointed out that the industry is still in its early stages when it comes to accelerated computing (read: Guide to Artificial Intelligence ETFs).
Case for NVDD Investing
Critics are also there in the market who believes that the AI boom will likely take time to materialize. Morgan Staley’s Wilson suggests that the benefits of huge investments toward AI may not be evenly distributed across the corporate landscape, potentially leaving many companies with disappointing returns on their AI spending, per Business Insider article, as quoted on Yahoo Finance. Hence, investors also need to ready for any sudden market crash.
Is There Any Competition?
At present, there are two leveraged ETFs on Nvidia – one is bull and the other is bear. These ETFs are Graniteshares NVDA 1.5X Daily ETF (NVDL - Free Report) and AXS 1.25x NVDA Bear Daily ETF (NVDS - Free Report) . NVDL charges 115 bps in fees and has garnered about $228.1 million in assets. Meanwhile, NVDS has an asset base of $108.1 million. The expense ratio of NVDS is 1.15% (read: Guide to Single-Stock ETF Investing).