Three summers ago, single-stock leveraged and inverse ETFs hit the market when AXS investments rolled out the first such fund in July 2022. Products from the likes of Direxion Investments, REX Shares, Leverage Shares, Defiance, and others followed rapidly. Since then, the field of such funds has exploded to well over 100 products, with the largest being the Direxion Daily TSLA Bull 2X Shares (TSLL) with $6.2 billion in assets under management.
Whether they’re drawing praise as innovative tools to game the markets or ire from those viewing them as weapons of mass portfolio destruction, they continue to sprout in 2025.
Through August 13, there have been just over 670 new ETFs launched and just over 17% of those have been single-stock ETFs. In July 2022, some may have dismissed these products as an industry fad that would soon fall to the wayside once investors realized the risk they can carry. That’s especially the case when you turn the wick up and add 2x or 3x exposure to a single stock. But they continue to occupy a notable portion of the market as long as demand for them remains.
So love them or hate them, they’re still around, and could be for some time.
Trends in Single-Stock ETFs
Through August 13, single-stock ETFs launched this year have also garnered just over $2 billion in assets. Those funds with the highest number of assets accumulated can offer a window into product demand.
The T-Rex 2X Long HOOD Daily Target ETF (ROBN) sits atop the AUM list, punctuating interest in Robinhood stock among self-styled traders. At runner up is the Leverage Shares 2X Long UNH Daily ETF (UNHG), possibly hinting that traders see future upside for the healthcare stock that’s been seeing downward pressure all year. Hims & Hers Health stock is up over 80% for the year, potentially speaking towards the number of assets accumulated by the Defiance Daily Target 2X Long HIMS ETF (HIMZ).
Of course, next to Palantir’s rally of over 140% this year, Hims & Hers pales in comparison. That rally opens the door for the Defiance Daily Target 2X Short PLTR ETF (PLTZ), which could mean traders are sensing that some short-term price weakness could be ahead after such a strong run. Of the top 10 in AUM, PLTZ is the only inverse fund in that list, so it appears more investors are erring on the side of bullishness in the near-term.
Demand Still Exists
Of course, single-stock ETFs only cater to a certain portion of the market that wants tactical tools to trade the markets irrespective if they head up or down. Financial advisors may find it difficult to recommend them to clients, especially the risk averse.
“Because of the features of these products and their associated risks, it would likely be challenging for an investment professional to recommend such a product to a retail investor while also honoring his or her fiduciary obligations or obligations under Regulation Best Interest,” said SEC commissioner Caroline Crenshaw back in July 2022. “However, retail investors can and do access leveraged and inverse exchange-traded products through self-directed trading.”
And it’s that self-directed trading that’s helping to fuel the launch of more single-stock ETFs. Given the popularity of the products thus far and the number of funds hitting the market, it appears the public has spoken — give us more.
For more news, information, and analysis, visit VettaFi | ETF Trends.
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