What was the first single stock ETF?
AXS was the first firm to launch ETFs that seek inverse and/or leveraged investment results based on the daily performance of high-profile single stocks.
The first ETF ever listed in the U.S. dates back from 1993 and is now a landmark ETF (SPY) ETF growth started on the back of passive investing and the first generation of ETFs were tracking market indices.
There are 45 single-stock ETFs in total, according to Morningstar, from a handful of providers including Direxion, AXS, GraniteShares and YieldMax. These ETFs follow bull, bear or option income strategies. The largest by asset size is the Direxion Daily TSLA Bull 1.5X Shares, which tracks Tesla .
The first ETF was launched in Canada in 1990, which paved the way for the introduction of the first U.S. ETF, the SPDR S&P 500 ETF Trust, in 1993. Designed to offer investors the diversification of a mutual fund with the flexibility of stock trading, ETFs took time before they started to grow rapidly in popularity.
What are single-stock ETFs? Single-stock ETFs use derivatives to provide leveraged and inverse returns on individual stocks. For example, say Tesla (TSLA) is reporting earnings and you're particularly bullish or bearish on their results. You might buy the stock or short the stock to potentially profit off your views.
State Street Global Advisors introduced the Standard & Poor's Depositary Receipt, better known by its arachnoid acronym, SPDR ("spider"), and traded under the symbol SPY, in 1993. It is the oldest ETF out there and remains one of the largest by any measure.
The world's first ETF was created in Canada in 1990, transforming the investment landscape and offering the advantages of pooled investing and trading flexibility. In their early days, ETFs were used primarily by institutional investors to execute sophisticated trading strategies.
Collectively, there are roughly 45 ETFs linked to individual stocks, and these funds represent some $3.5 billion in assets under management. While that's still tiny next to the rest of the ETF industry, it's nonetheless impressive, especially considering the category had zero assets just a few years ago.
A single-stock exchange-traded fund allows you to leverage a single company, and potentially earn a significantly higher return. Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016.
Key Takeaways. Single-stock exchange-traded funds (ETFs) allow ordinary investors to take leveraged or short positions in single stocks using an exchange-traded product. Leveraged single-stock ETFs provide new opportunities for investors in a volatile market, but at greater risk.
Who started the first ETF?
ETF Inventor Nate Most's Keys:
Inventor of the ETF structure, arguably the most important financial innovation of modern times. Created the first and still-largest ETF, the SPDR S&P 500 Trust.
Thirty years ago this week, State Street Global Advisors launched the Standard & Poor's Depositary Receipt (SPY), the first U.S.-based Exchange Traded Fund (ETF), which tracked the S&P 500.
Direxion launched its first leveraged ETFs in 2008. In November 2008 the company was the first to offer ETFs with 3X leverage, a move that was copied some months later by its competitors ProShares and Rydex Investments.
What Does It Mean When an ETF Is Leveraged 3x? An ETF that is leveraged 3x seeks to return three times the return of the index or other benchmark that it tracks. A 3x S&P 500 index ETF, for instance, would return +3% if the S&P rose by 1%.
Leveraged 2X ETFs are funds that track a wide variety of asset classes, such as stocks, bonds or commodity futures, and apply leverage in order to gain two times the daily or monthly return of the underlying index.
If you don't want to put a lot of effort into managing your investments, then S&P 500 ETFs are a good solution. But if you're willing to do the work, then you might do even better in the long run with a portfolio of hand-picked stocks (although, the odds are against you).
Founded in 1929, Wellington™ Fund is Vanguard's oldest mutual fund and the nation's oldest balanced fund. It offers exposure to stocks (about two-thirds of the portfolio) and bonds (one-third of the portfolio).
| Symbol | Name | 3-Year Return |
|---|---|---|
| IYE | iShares U.S. Energy ETF | 27.69% |
| SVXY | ProShares Short VIX Short-Term Futures ETF | 27.48% |
| PXJ | Invesco Oil & Gas Services ETF | 26.83% |
| FXN | First Trust Energy AlphaDEX Fund | 25.85% |
The first gold ETF launched was Gold Bullion Securities, which listed 28 March 2003 on the Australian Securities Exchange, by ETF Securities and its major shareholder, Graham Tuckwell.
| Fund (ticker) | YTD performance | Expense ratio |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 10.4 percent | 0.03 percent |
| SPDR S&P 500 ETF Trust (SPY) | 10.4 percent | 0.095 percent |
| iShares Core S&P 500 ETF (IVV) | 10.4 percent | 0.03 percent |
| Invesco QQQ Trust (QQQ) | 8.6 percent | 0.20 percent |
What is the biggest ETF?
- SPY - $501.50 billion.
- IVV - $450.03 billion.
- VOO - $420.71 billion.
- VTi - $380.70 billion.
- QQQ - $258.64 billion4.
Invesco QQQ (best known by its ticker symbol, QQQ; full fund name Invesco QQQ Trust, Series 1), is an exchange-traded fund created by Invesco PowerShares. QQQ tracks the performance of the Nasdaq-100.
- Source: Vanguard: Data current as of April 2, 2024. Data is intended for informational purposes only.
- Total Bond Market ETF (BND)
- Total International Bond ETF (BNDX)
- Total International Stock ETF (VXUS)
- Total Stock Market ETF (VTI)
Holding too many ETFs in your portfolio introduces inefficiencies that in the long term will have a detrimental impact on the risk/reward profile of your portfolio. For most personal investors, an optimal number of ETFs to hold would be 5 to 10 across asset classes, geographies, and other characteristics.
The single biggest risk in ETFs is market risk.
