Single-Stock ETFs

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After recent approval by the SEC earlier this year, a new wave of ETFs have began flooding the market in the form of a single-stock product. Since approval, proposals for new funds have surpassed over 200 entries aiding in the expansion of the ETF sector as a whole. It is a bit odd to think of an ETF having only one position as they are considered a basket of securities but nonetheless many issuers have began rolling out their funds with a good majority holding positions in some of the most popular U.S. companies such as, Apple (AAPL), Tesla (TSLA), Nike (NKE) and Coinbase (COIN). Many of the new single-stock ETFs operate differently than most funds by resetting their buy price often looking to give investors a short term way to gain on a company but the strategy of quick results tied in with only being invested in one stock brings a lot of volatility to single-stock ETFs making them a high-risk high-reward way for investors looking to play on a stock jump. The funds are leveraged meaning they seek the performance of a stocks daily return. As of right now there are four types of single-stock ETFs:

Leveraged long single stock ETFs look to multiply their stock, so if their held company rises 3% for that day, the ETF will rise 6%.

Short single-stock ETFs seek the inverse of their selected company, so if their stock price falls 3%, the ETF will rise 3%.

Leveraged short single-stock ETFs seek the inverse of their stock in a multiple, meaning a 4% fall would boost the ETF up 8%.

Hedged single-stock ETFs offer a targeted return of the stocks daily gain or loss but the returns are capped at a maximum and minimum percent.

Here are a few single-stock ETFs and their YTD performance:

  • Innovator Hedged TSLA Strategy ETF (TSLH) -4.70%
  • GraniteShares 1.5X Long COIN Daily ETF (CONL) -33.55%
  • GraniteShares 1X Short TSLA Daily ETF (TSLI) +25.68%
  • GraniteShares 1.75X Long AAPL Daily ETF (AAPB) -28.10%
  • AXS 2X NKE Bull Daily ETF (NKEL) -30.25%
  • Direxion Daily AAPL Bull 1.5X Shares (AAPU) -24.39%
  • Direxion Daily AAPL Bear 1X Shares (AAPD) +17.35%

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