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Exchange Traded Funds (ETFs) tied to Nvidia (NVDA) like T-Rex 2X Long Nvidia Daily Target ETF (NVDX), Direxion Daily Nvda Bull 2X Shares (NVDU), and GraniteShares 2x Long NVDA Daily ETF (NVDL) were pummelled during Monday's sell-off when Nvidia saw record losses.
TMX VettaFi head of research Todd Rosenbluth sits down with Seana Smith on Catalysts as part of the ETF report to discuss how the downward spiral showcases the dangers of investing in ETFs tied to a single stock.
"I think it was a wake-up call," Rosenbluth says, adding "We've seen a lot of money going into single-stock leveraged ETFs ...We've seen a lot of money going into those megacap growth-oriented strategies. We think this is a good time for investors to remember diversification and diversification benefits."
"Artificial intelligence [AI] is a mega trend theme that's going to resonate not only in 2025 but beyond," the analyst says, noting "There are more diversified ways to get exposure using ETFs." He highlights the Robo Global Artificial Intelligence ETF (THNQ) as an option for investors to play the AI trend without sacrificing diversity in their portfolio.
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This post was written by Naomi Buchanan.