Janice R. Andrews
As trading volumes and inflows reach previously unheard-of levels, investors and fans for artificial intelligence are increasingly flocking to an exchange-traded fund (ETF) that multiplies bets on Nvidia Corp.
Last week, the GraniteShares 2x Long NVDA Daily ETF (ticker NVDL) brought in a record $252 million in new money, enhancing its standing as the go-to option for investors looking to increase their exposure to Nvidia. The ETF had its second-highest trading volume on Monday, suggesting that demand is still there even if Nvidia’s stock price somewhat declined after Friday’s decline.
Since its launch at the end of 2022, the fund has grown quickly to handle $1.4 billion in assets, demonstrating investors’ faith in Nvidia’s future. Many people think that Nvidia, led by Jensen Huang, is well-positioned to benefit from important technological changes in the world economy, offering rich stock market chances.
In the course of Friday’s roughly 6% drop in Nvidia’s share price, record trading volumes in the NVDL ETF exceeded $2 billion in transactions. On that day, a net inflow of $102 million was made into the fund by investors who may have been betting on a temporary turnaround in the semiconductor company’s performance.
Head of ETFs at JonesTrading Dave Lutz emphasizes the ETF’s significant trading volume and views NVDL activity as a crucial indicator of retail mood and activity. Furthermore, data from Markit Securities shows that the fund has very little short interest—just 1.5% of outstanding shares—compared to other funds.
On Tuesday, there will be an examination of how resilient Nvidia’s climb is, as it coincides with the announcement of a noteworthy inflation data that may have an impact on market mood.
With outstanding gains of 156% so far this year, NVDL is the second-best performing ETF in the US market for 2024. With gains of about 179%, the T-Rex 2X Long NVIDIA Daily Target ETF (ticker NVDX) is at the top of the field. It’s important to remember that NVDL’s trailing performance may be explained by the fact that, up until mid-January, it was a 1.5x leveraged fund.
Nvidia’s stock has dropped two days ago, but it is still up a noteworthy 70% since the year’s beginning.
The increase in interest and money flowing into the Nvidia ETF is indicative of investors’ increasing optimism in the company’s future, especially in the areas of semiconductor and artificial intelligence. The ETF is still a primary attraction for investors looking for further exposure to one of the biggest names in the IT sector, even as the market anxiously awaits important economic data and Nvidia’s sustained success.
