Exchange Traded Fund provider GraniteShares has launched nine 3x long and nine 3x short (inverse) Exchange Traded Products (ETPs) on some of the top performing US technology stocks, and all are now listed on London Stock Exchange.
The daily ETPs provide long and short exposure to Alphabet, Amazon, Apple, Microsoft, Netflix, Facebook, NVIDIA, Tesla and Uber. No other ETPs provide this level of short and leveraged exposure to these popular US tech stocks.
Traders and sophisticated investors will be able to access these new ETPs for a fraction of the price that they would have to pay to buy the individual stocks. The ETPs are listed at a price of $5.00, while most of the stocks being tracked by the ETPs trade at prices in excess of $200, Amazon, for example, closed on 30 June at $2,758.82, Apple at $364.80, Netflix at $455.04, Tesla at $1,079.81.
Investors will also have the opportunity to trade ETPs on these popular US stocks in UK trading hours, as opposed to when the US markets open.
GraniteShares chose to launch the new range of ETPs because they are at the centre of a megatrend, delivering long-term growth through a technological revolution sweeping through societies and economies worldwide.
Tech sector has been top performer
Analysis by GraniteShares reveals that of the 11 sectors within the S&P 500, the technology sector has consistently been a top performer. For example, over three months, six months, one year and five years to 30 June 2020, it has delivered growth of 27.58%, 14.35%, 33.89% and 152.39% respectively. The corresponding figures for the S&P 500 are 18.03%, -3.76%, 5.39%, and 50.27%.
Over the past six months, the tech element of the S&P 500 was one of only three sectors that delivered growth (Consumer Discretionary and Communication Services being the others), and over a year it was one of five to provide positive returns.
In terms of the individual stocks the new GraniteShares ETPs are tracking, analysis reveals that over the past six months, one year and five years, they have consistently featured among the top performers in the S&P 500.
Will Rhind, Founder and CEO at GraniteShares commented:
“We listed 3x short and leveraged ETPs on eleven FTSE 100 stocks in November last year. These are trading with tight spreads and starting to see significant traction. With increased market volatility and a stellar performance from leading companies within the US tech sector, many of which are familiar household names and widely followed by UK investors, now is a great time to launch our new products.”
Growth in stock markets is often concentrated in a small group of companies and the new products focus on some of the stocks that have been the key drivers of S&P 500 returns.
Figures from ETFGI show that the global short and leveraged ETP market was worth around $77 billion at the end of last year, but most of this is in the US. Indeed, of the 20 largest short and leveraged ETPs in the world, 12 are listed in the US, six in Asia, and there are just two in Europe (one in France and one in Germany). As with unleveraged ETFs, GraniteShares believes that there is scope for significant growth in the short and leveraged ETP market in the UK and Continental Europe.
“We aim to play a key role in this both in terms of educating investors and giving them the toolkit to help them achieve their investment goals,” Rhind said.
GraniteShares launched in the US in 2016, with an initial focus on shaking up the commodity investment space. Today its offering ranges from low-cost access to gold to high income and disruptive equity investing. GraniteShares is backed by Bain Capital and other well-known ETF investors. GraniteShares’ ETFs are listed on the New York Stock Exchange and its range of short and leveraged single stock ETPs are listed on London Stock Exchange. GraniteShares’ assets under management stood at US$1137.5 million / £917.3 million on 30 June 2020.