Issuers Grow More Creative With Leveraged Strategies

Issuers Grow More Creative With Leveraged Strategies

The list of leveraged funds is growing rapidly.

Wealth Management Editor
Reviewed by: Staff
Edited by: James Rubin

It wasn’t very long ago when hedging market risk or leveraging exposure for souped-up performance was left to a sophisticated subset of investment professionals. And access to those strategies was limited to wealthy individuals and institutional investors that could meet the investment minimums and, at least theoretically, endure the added potential volatility.

Now, thanks to the innovation that has swept across the ETF space, with some help from an approving Securities and Exchange Commission, anyone with a brokerage account or a trading app on their phone can swim in the waters of hedging and leverage.

As Rob Isbitts details in a recent story, the doors are virtually wide open for creative portfolio management and active trading.

The creativity in the exchange-traded funds space has introduced ways to short entire indexes if one feels like betting against it, or if you’re feeling extra bullish, there’s a leveraged strategy for just about anything.

And the list is growing. There are currently eight ETFs offering flavors of leverage and inverse exposure to Nvidia Corp., the artificial intelligence poster child that has been essentially carrying the stock market for the past few years.

Tuttle's 44 Single Stock ETFs

Last week, a partnership between Tuttle Capital Management and Rex Shares filed for 44 separate single stock ETFs offering leveraged and inverse exposure to 22 different companies.

For most financial advisors, this single-stock ETF trend that was born less than two years ago with SEC approval, is still noise that should be left to the day traders and other aggressive investing types. One could even argue the flood of creative new ways to find trouble in the financial markets simultaneously rolls out the red carpet for hard working financial advisors acting as fiduciaries to help clients steer clear of trouble and focus on long-term goals.

Regardless of whether you’re the type of advisor prone to stand between your clients and certain risky strategies, or if you’re the type who might dabble in such strategies, the message is pretty clear this latest trend in the ETF space isn’t going away and shouldn’t be ignored.

Jeff Benjamin is the wealth management editor at, responsible for coverage related to the financial planning industry. This includes writing, hosting podcasts, webinars, video interviews and presenting at in-person events.

Jeff is a veteran journalist with more than 30 years’ experience covering the financial markets. He has won more than two dozen national and regional awards for his reporting. He most recently worked as a senior columnist at InvestmentNews where he wrote about investment products and strategies, as well as the broader financial planning industry. Prior to that, Jeff worked as an analyst at Cerulli Associates where he researched and wrote reports on the alternative investments industry. Jeff also worked as a money management reporter at Dow Jones Newswires, where he covered the mutual fund industry.

Based in North Carolina, Jeff is a former Marine and has a bachelor’s degree in journalism from Central Michigan University.