As earnings season heats up, single-stock ETFs might garner attention. If they do, AXS Investments could recross the $1 billion assets under management mark. With over $920 million in assets according to VettaFi data, the firm (whose name is pronounced Access, despite the unique spelling) was the first to offer leveraged and inverse ETFs connected to one single stock. AXS rang the opening bell this morning at the NASDAQ Times Square site to celebrate these products.
The AXS Tesla Bear Daily ETF (TSLQ) and the AXS 1.25 NVDA Bear Daily ETF (NVDS) are the two largest of these products based on assets under management. While down 40% and 57%, respectively, the 2.7 million and 1.6 million shares traded on average each day for TSLQ and NVDS is a greater sign that these ETFs have gained a following, despite launching only in July 2022.
AXS Single Stock ETFs hold a swap contract, which is typically a derivative contract issued by an investment bank, which provides leverage for the appropriate level of exposure. The leverage resets daily to achieve the targeted objective, but increases the risk for investors who hold a strategic position rather than a short-term tactical one. AXS also offers single security bullish and bearish ETFs tied to Nike, Pfizer, and PayPal
Tesla and NVIDIA individual shares are both up sharply to start 2023, which is why the inverse ETFs are down. However, the success of the shares could shift once investors digest the latest earnings results and forward guidance. Telsa reports results after the close on Wednesday, while NVIDIA’s next earnings come out in May. These single-stock inverse ETFs can be used either as a standalone or to protect against the downside of existing positions in these growth companies.
The firm’s largest ETF is also an inverse ETF, but rather than a bet against a single stock, the AXS Short Innovation Daily ETF (SARK) attempts to achieve the inverse of the return of the ARK Innovation ETF (ARKK) for a single day. SARK is a convenient way for those that believe disruptive innovation is overbought to express such sentiment.
AXS also offers ETFs for more strategic-minded long-term investors. For example, the AXS Astoria Inflation Sensitive ETF (PPI) is an actively managed multi-asset ETF focusing on fixed income and commodity ETFs, as well as individual energy and materials companies that can benefit from a high inflation environment. Meanwhile, the AXS Cannabis ETF (THCX) provides access to companies connected to the legal cannbis market.
SARK and THCX became part of AXS Investments through acquisition. In October 2023, CEO Greg Bassuk told VettaFi “We have a very aggressive pipeline of acquisitions, partnerships, and new products that will continue to drive innovation in the ETF space at a magnitude the industry has not seen historically.” At VettaFi, we are excited to see what comes next.
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