GraniteShares Proposes 32 New Single-Stock ETFs

GraniteShares Inc., which manages $1.34 billion in 12 exchange-traded funds, is seeking to launch 32 single-stock ETFs, which, if approved, would roughly double their number on U.S. exchanges. 

New York-based GraniteShares, which manages $1.9 billion in total assets, filed with the Securities and Exchange Commission to launch single-stock ETFs covering companies ranging from electric vehicle makers like Tesla Inc. to tech firms such as Apple Corp. and older blue chips like Exxon Mobil Corp. 

GraniteShares already offers seven single-stock ETFs. Their performance, like the others in the single-stock group, has been mixed. The firm’s largest, the $22.5 million GraniteShares 1.5x Long NVDA Daily ETF (NVDL), has gained 39% over the past three months betting on Nvidia Corp. Its second-largest, the GraniteShares 1.5x Long COIN Daily ETF (CONL), has dropped 9.2% betting on Coinbase Global Inc.  

While initially met with skepticism from many investors, single-stock ETFs are gaining acceptance and recently topped $1 billion in assets thanks to their positive returns. 

The proposed funds would let investors take short and leveraged positions on 12 different companies with leverage levels between -1.75x and 1.75x. The funds seek to amplify daily stock moves with derivatives, and as a result, longer-term returns typically diverge significantly from those of the underlying stock. 

While the group of 12 companies includes players in several sectors, there is a disproportionate focus on the highly traded electric vehicle industry with Rivian Automotive Inc., Lucid Group Inc., NIO Inc., and Tesla.  

There are also the tech giants Apple and Facebook parent Meta Platforms Inc., chipmakers Advanced Micro Devices Inc. and Nvidia, as well as JPMorgan Chase & Co, Coinbase, ExxonMobil and American Airlines Group Inc. rounding out the list. The number of funds per company varies from just one for NIO to five for Tesla, each one offering a different level of long or short leverage. 

GraniteShares’ Chief Executive Officer Will Rhind told etf.com in an interview that it launched the funds now because regulatory restrictions on leveraged ETFs have loosened, and that they’ve launched over 100 in Europe since 2019.  

The 12 companies selected, he said, were chosen for a variety of reasons but among them were that they had high trading volume and in many cases were ones they’d already offered in Europe.  

Taking a leveraged position can be expensive due to margin interest fees, and getting access to a margin account can be complicated, while leveraging through options contracts is even more complicated. Rhind says putting leveraged and short positions in an ETF package is meant to “democratize access to leverage.”  

Contact Gabe Alpert at [email protected]