The GraniteShares 1.5X Long NVDA Daily ETF, which tracks the performance of U.S. chipmaker Nvidia Corp, has emerged as the top-performing ETF of 2023 so far. The ETF has gained an impressive 328.5% this year, outperforming other funds in the market. This surge in performance can be attributed to the growing interest in artificial intelligence (AI) and the dominance of Nvidia in this field.
Nvidia has become the go-to stock for investors looking to capitalize on the AI frenzy. The company’s stock has risen by 190%, driving the impressive returns of the GraniteShares ETF. According to Will Rhind, CEO and founder of GraniteShares, Nvidia’s astonishing performance is the key factor behind the ETF’s success. He states, Nvidia has become the number one stock to own in AI.
Leveraged ETFs like the GraniteShares NVDA ETF seek to amplify the returns of the underlying index or stock. This allows investors to benefit from the performance of a particular stock or sector. The GraniteShares 1.5x Long Meta Daily ETF, another leveraged ETF, has also performed well this year, rallying 272% year-to-date.
The success of these ETFs has attracted a lot of interest from investors, resulting in a significant increase in net assets. The GraniteShares NVDA ETF’s net assets have climbed to $205.6 million from half a million dollars since its launch in December 2022. Single-stock ETFs that offer increased exposure to specific companies, such as Nvidia and Meta Platforms, have gained popularity among investors.
Notably, other firms have launched their own ETFs tied to Nvidia. Direxion, REX Shares, and Tuttle Capital Management are among the companies that have introduced ETFs providing exposure to Nvidia. While leveraged ETFs can be enticing due to their volatility, Bryan Armour, director of passive strategies research at Morningstar, warns that they are ultimately a losing proposition over the long run.
In summary, the GraniteShares 1.5X Long NVDA Daily ETF has emerged as the top-performing ETF in 2023, driven by the remarkable performance of Nvidia in the field of AI. This ETF, along with other leveraged ETFs, has attracted significant interest from investors. However, it’s important to consider the inherent risks associated with leveraged ETFs.