Experts sound the alarm over popular ETF that can quickly 2X your money. And you’re likely doing something just as risky

For those who privation dependable maturation successful their portfolios, exchange-traded funds (ETFs) are a communal suggestion.

Since their instauration successful the 1990s, ETFs person gained a estimation arsenic a harmless and astute prime for status savings, particularly erstwhile they connection vulnerability to indexes similar the S&P 500. However, a caller class of “single-stock ETFs” flies successful the look of this accepted image. In galore ways, these caller blistery trading products are precisely the other of what an ETF was meant to be.

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Unlike ETFs that negociate ample pools of assets, single-stock ETFs absorption connected a azygous company, but that’s not all. To amp up volatility, these higher-risk ETFs often usage leverage and precocious products similar swaps to treble returns — oregon losses.

Although determination are present hundreds of single-stock ETFs disposable successful modular brokerage accounts, imaginable investors should recognize however these funds run and wherefore they disagree from modular ETF offerings.

Single-stock ETFs person lone been astir since 2022 erstwhile AXS Investments archetypal got the greenish airy from the U.S. Securities and Exchange Commission. Since then, much fiscal firms person added single-stock ETFs to their offerings, with implicit 200 launched successful 2025 unsocial (1).

Typically, these single-stock ETFs way large companies similar Tesla oregon Nvidia and connection investors treble the vulnerability to the stock’s regular terms movements. So, if Tesla goes up by 2% connected immoderate fixed day, idiosyncratic holding its single-stock ETF volition spot a 4% rise.

That’s bully quality erstwhile the marketplace moves successful a favorable direction, but it besides makes it truly casual to suffer wealth connected atrocious days.

Although single-stock ETFs connection treble the vulnerability today, plentifulness of firms are trying to summation this volatility, with immoderate proposals aiming to connection products with upwards of 5 times the vulnerability (2).

The evident attraction for single-stock ETFs is the imaginable for higher gains. When idiosyncratic believes a banal is astir to spell up successful the adjacent term, loading up connected single-stock ETFs volition marque them much money, but that’s lone if said capitalist is correct.

This is peculiarly existent during net play erstwhile stocks are other volatile aft companies merchandise their respective reports. Unsurprisingly, Mo Sparks from the leveraged ETF steadfast Direxion told Barron’s that helium sees the astir “elevated activity” for single-stock ETFs during this clip (3).