Investors are flocking to Nvidia-focused exchange-traded funds (ETFs) amidst the AI frenzy, with a bullish fund tracking the chip designer’s shares experiencing an all-time high in inflows on Wednesday.
According to LSEG Lipper data, net daily inflows into the GraniteShares 2x Long NVDA Daily ETF (NASDAQ:NVDL) reached a record $197 million. The ETF’s assets under management have surged from $213.75 million at the beginning of the year to $1.41 billion.
This surge in inflows is significant as risk-averse investors have traditionally shied away from leveraged ETFs tracking single stocks due to their short-term return objectives. However, these ETFs, which debuted in the US in 2022, have gained popularity among speculators seeking to capitalize on the volatility of individual stocks based on earnings and other news.
Nvidia (NASDAQ:NVDA), which commands approximately 80% of the high-end AI chip market, has seen its stock soar by nearly 82% since the start of the year, buoyed by robust forecasts and renewed excitement surrounding AI technology.
Leveraged single-stock ETFs aim to amplify the returns of an underlying stock for a single day, usually by two or three times, utilizing financial derivatives and leverage.
Todd Rosenbluth, chief ETF strategist at VettaFi, commented, “Nvidia has been the hottest stock in 2024, and many investors are eager to seek out higher returns in exchange for added risk.” He anticipates continued demand for single-stock leveraged ETFs as new must-own companies emerge.
In February, net monthly inflows into leveraged ETFs tracking Nvidia, including the GraniteShares 2x Long NVDA ETF, the Direxion Daily NVDA Bull 1.5X Shares ETF (NASDAQ:NVDU), and the T-Rex 2X Long Nvidia Daily Target ETF, reached a record high. The GraniteShares ETF has already surpassed its net monthly flow record within the first six days of March.
The assets of these three Nvidia-linked ETFs have surged between five and 11 times since the beginning of 2024, while their prices have risen between 143% and 218% year-to-date, outpacing other ETFs.
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Author Faith Yakubu 
