Leveraged ETFs Bet on Mega-Cap Tech Stocks

Asset management companies are rushing to offer investors still more ways to play the boom in U.S. mega-cap technology stocks.

By Suzanne McGee

Asset management companies seeking to offer investors still more ways to play the boom in U.S. mega-cap technology stocks are rolling out new exchange-traded funds (ETFs).

GraniteShares on March 18 launched three new leveraged ETFs designed to generate twice the daily return of Microsoft, Amazon.com and Advanced Micro Devices.

In the 15 months since the firm launched its 2x leveraged Nvidia ETF, its assets have soared to $2 billion.

“We wanted to make a similar product available based on AMD,” said Will Rhind, CEO of GraniteShares.

The ProShares Nasdaq-100 High Income ETF launched on March 20. The firm said the new fund’s strategy will combine a long position in the Nasdaq-100 Index with a short position in Nasdaq-100 Index call options. The goal, ProShares said, is to use swap agreements to capture exposure to those options and deliver both total return and high income.

Roundhill Investments also has rolled out a series of covered call and leveraged ETFs tied to the Nasdaq 100 and the so-called Magnificent Seven – the group of megacap tech stocks that has dominated the U.S. market in recent months.

Direxion, another provider of leveraged ETFs, has launched two new funds tied specifically to the Magnificent Seven and offering speculators a way to bet on daily movements in the group. The Direxion Daily Concentrated Qs Bull 2x ETF delivers double their daily gain; its counterpart, the Direxion Daily Concentrated Qs Bear 1x ETF, is designed to capture 100% of the inverse of any move in the group.

GraniteShares’ Rhind said he hopes to introduce leveraged funds tied to stocks like American Airlines and Exxon Mobil to prove that demand for these ETFs extends beyond technology stocks. He did not give a time frame for those launches.

Thie article was provided by Reuters.

Latest news

Charitable Contribution Tax Scheme Ends in 8-Year Prison Sentence

The scheme, "The Ultimate Tax Plan," purported to offer high-income clients a way to reduce their taxes through false charitable deductions.

Soaring Car Insurance Costs Hit New-Car Buyers

In one of the cruel twists of an inflation-weary U.S. economy, car prices are coming down — but insurance on them is going way up.

401(k) Balances Soared in 2023, Especially Among Younger Savers

Strong financial markets contributed to gains in 401(k) account balances in 2023, but plan participation declined, says T. Rowe Price study.

First Female SEC Commissioner Dies at 86

Roberta Karmel, nominated by President Jimmy Carter, enforced, practiced and taught securities law for 60 years before retiring in 2022.

‘No Landing’? Investors Seem to Think So

Morgan Stanley equity strategists say investors have been bracing for a "soft landing" for the economy, but now see a "no landing" scenario.

RIA Network Names Regional Director

Sanctuary Wealth, an advisor network with $30 billion in assets, appoints a former Wells Fargo and UBS executive as a West Coast director.