NVDL on Track to Become Second Billion Dollar Single Stock ETF
The Nvidia ETF is up nearly 500% over the past year.
No exchange-traded fund has benefited more from Nvidia’s head-spinning price surge than the GraniteShares 2x Long NVDA Daily ETF (NVDL).
Up 119% so far this year, NVDL has returned more than all but one ETF in 2024, while over the past year, NVDL’s monster 483% gain is significantly more than any other fund.
Such spectacular returns have caught the attention of traders, who have plowed $375 million into the ETF this year and $562 million into it over the past year.
The combination of hefty inflows and sizzling performance pushed NVDL’s assets under management to $958 million on Friday, putting it on the brink of the $1 billion milestone.
Were it to cross that vaunted level, NVDL would be just the second single stock ETF to do so. Last year, AUM in the Direxion Daily TSLA Bull 1.5X Shares (TSLL) reached nearly $1.2 billion.
Since then, TSLL’s AUM dropped to $855 million as shares of Tesla underperformed. That means that NVDL is now the biggest single stock ETF on the market, which seems appropriate given how hot Nvidia is thanks to its dominant position in the AI chip industry.
GraniteShares’ Cash Cow
NVDL debuted in December 2022 just ahead of a fivefold increase in Nvidia’s stock. It’s one of 10 single-stock ETFs that issuer GraniteShares currently offers and recently became the largest of all the issuer’s funds, surpassing the GraniteShares Gold Trust (BAR).
But whereas BAR is a cheap fund with an 0.175% expense ratio, NVDL has a much larger 1.15% price tag.
That type of expense ratio isn’t unusual for leveraged ETFs, which are typically used by short-term traders rather than long-term investors. And it makes them lucrative for the issuers who are able to attract significant sums of money into these products.
With a 1.15% expense ratio and $1 billion in AUM, NVDL throws off $11.5 million of annual revenue, seven times more than BAR throws off with an equivalent asset base and an 0.175% expense ratio.