NightShares ETFs to Liquidate Due to Underperformance and Limited Assets

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The NightShares 500 ETF (NSPY) and NightShares 2000 ETF (NIWM), with assets of $3.7 million and $1.4 million respectively, will cease trading at the end of the month and liquidate on August 10. AlphaTrAI Funds, the investment adviser for both ETFs, made the decision in the “best interests” of the funds and their shareholders due to poor performance and low asset attraction.

Both ETFs, launched last June, have struggled to meet their benchmarks, using futures and swaps to capture overnight market returns. Although overnight action has shown better returns due to off-hours news announcements, real-world implementation costs such as trading expenses have impacted performance. NSPY has dropped 6.9% on a total return basis since inception, compared to a 22% rally for the S&P 500, and NIWM is down over 10% while the Russell 2000 climbed 16% during the same period.

The NightShares 500 1x/1.5x ETF (NSPL), with $15 million in assets, which launched in October and offers leveraged exposure to overnight performance, has performed better but still lags behind the S&P 500. The NightShares leveraged fund will continue to operate, and the company is working on launching the NightShares Select ETF, indicating a product pivot rather than a full retreat.

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