Leveraged ETFs: Precision Tools for Tech, Defense, and E-Commerce Traders
What investors seem to be demanding and interested in is precision, flexibility, and optionality.
As the ETF landscape evolves, a new class of products is gaining traction: leveraged and inverse single stock ETFs. First introduced in 2022, these funds offer amplified exposure to individual equities while amping up risk and volatility. In this segment, we're going to examine recent trends in this burgeoning ETF category and a few others. Helping us to get to the bottom of it is Mo Sparks, the chief product officer at Direction. Mo, thank you for being here. Ron, thanks for having me.
As of mid-2025, the total assets under management invested in single stock ETFs in the US reached almost $38 billion. Direction has been there right from the start and a leading pioneer in this space. Before we talk about specific ETF tickers, why have traders and strategic-oriented investors been gravitating toward leveraged and inverse single stock ETFs? Ron, it's a great question. You said it at the onset in terms of growth. It's growth upon growth in our industry as a whole of ETFs. If we look at where we compete across leverage and inverse, we're a clear leader, and what we've seen particularly with our single stock franchise is that franchise is about $10 billion in assets now, so it's grown quite rapidly.
What investors seem to be demanding and interested in is precision, flexibility, and optionality. That's what these tools are built for to deliver on those three points. They are tools that are tactical in nature and built for traders who are looking to express a view on the markets, whether it's something that's happening in earnings. We're just wrapping up an earnings season that has clearly been very notable in terms of surprises on the upside, some misses on the downside. These tools are built to give those traders an opportunity to play either side. We'll talk to some specific names in a little while, but what we have tried to do is to continue to evolve our lineup to support the modern retail trader, and that is an evolving set of investors and traders. Those needs are changing at all points in time, so we brought a lot of new product to market. We continue to look at new single stock opportunities for companies that we see as emerging and that traders may find to be quite interesting, as well as things outside of that, which we can touch on a bit later as well. Yeah, and traders certainly have been responding to that with the booming assets as well as trading volume.
Let's talk specifically about some new bull and bear ETFs that Direction recently launched linked to Ford Motors, Shopify, and Lockheed Martin. Congrats on the recent launches. What type of traders might be interested in Direction's bull and bear ETFs linked to these companies? I think what's interesting about these three names is, in some ways, non-traditional in terms of how they fit together. The through line between Lockheed Martin and Shopify is quite wide. If you were to look at Direction's social media, I think we did a very nice job of highlighting a fighter jet with a shopping cart on top of it, which makes the story kind of tell itself and sing from that perspective. As it pertains to the underlying names, I think what we see is traders are interested in three companies that are leaders within their given industries.
We're thinking about someone like Ford, clearly in the midst of an evolution. There's been some more recent news off of the second wave of the Model T movement within Ford and this Christmas tree assembly line that they're putting together. A nice social plug as well in terms of some of the things that are behind that. One who wants to ride the wave from a potential of that electronic shift happens at someone like Ford, there is an opportunity there. If one thinks that the moment maybe has passed for a longtime automotive American-made manufacturer, you have an opportunity to take the other side from a trading perspective and express that short-term view. With something like Shopify, I think we see an emerging e-commerce company that's really the backbone of a number of not only online sites but increasingly brick-and-mortar retailers that exist not only here in the US but globally as well. I think offering the same investors and traders an opportunity to be on either side.
As we look at Lockheed Martin, the news yesterday with President Trump and Mr. Putin meeting in Alaska is very telling in terms of the geopolitical landscape is ever-evolving, and at the nexus of that is none other than aerospace and defense companies. Lockheed Martin here in the US being a leader, so the same trend kind of applies, allowing for our traders to seek those opportunities that may present themselves in the market to express a view on either side. Yeah, makes sense. Now beyond Ford Motors, Shopify, and Lockheed Martin, are there any others that you could mention briefly, single stock ETFs from Direction that you've seen a real pickup in terms of trading volume and asset flows? Our lineup now has roughly 40 ETFs, and I mentioned at the onset about $10 billion in assets, so we have a plethora of options for traders to consider and a set that will continue to grow here.
Specifically, maybe there's a few that I would highlight. One I think you'd be hard-pressed to miss, really what I would say is a category definer in our Tesla product, TSL, long Tesla, as well as TSLS for short Tesla, so taking a bullish view on the first and a bearish on the second. That fund or ETF is about $6 billion in assets and so really here to stay. It trades about $2.5 billion every single day and so highly liquid, allows for one to come in and out, and extremely low cost. Where we started talking about precision and flexibility, I think that product kind of defines that for us. You go down the list, and there's a number of new entrants that we've brought to market that I would say are worthwhile to mention, specifically something like Palo Alto Networks recently reported earnings as well. Other side of the technology evolution and revolution that's taking place here globally is cyber and how one protects themselves, so we now offer products off of that name as well.
Similar vein is someone like Cisco, and so we offer a bull and a bear version, CSC and CSCS for those that are looking to express either side of the equation as well. Other few that I'd maybe just spotlight quickly would be, different industry, but really healthcare has been in focus. Nova Nordis most recently announcing a cut in terms of the price of their wonder drug for obesity. State side we have Eli Lilly, who is a competitor within that marketplace. Earlier this year, we launched a pair, Eel and EI, for those investors who are very interested in playing news, earnings, sentiment associated with that trend that we're seeing in the marketplace as well. I think that gives kind of a plethora of options that are out there. One thing that's useful is you can always find all these ETFs at direction.com. We tend to try to use a common nomenclature with either an L for long or an S for short or a U for up or a D for down to allowing all investors to better understand they're investing in a bullish or bearish manner. I like it. A trader-friendly user interface.
Let's talk about gold prices, which have been trading near all-time highs, and I'm curious as to how some of the leverage mining ETFs like NUGT, Nugget, and Jug, JNU, are responding. Also, we understand that there's some upcoming adjustments to the underlying index for both Nugget and Jug and, of course, their bearish pairs. Tell us more. Yes. I think that it's been hard to ignore the continued kind of noise in the marketplace, and gold has long been a safe haven for many investors and traders to take a moment to breathe. What we've seen clearly this year is gold in itself, a rise in terms of price. Naturally, one would think that that would also correspond to interest in something that is a bull or a bear, particularly on the bull side for those that have been looking to profit, or bear, those that maybe are taking a directional bet that things may be going another way in time. We've seen elevated volumes across the lineup of the four pairs that we have on both gold miners as well as junior gold miners.
As you spotlighted, all products sometimes go through a change. For Dust, we're actually in the process of an index conversion, and so that product is built off of an existing ETF. That ETF made an index change, and we made the decision after careful consideration to go ahead and transition with the underlying ETF to the new index for an end trader. Really no difference in terms of expectation. What you still have is a very liquid index, highly tradable. All the qualities that one was looking for in that product will carry over. That's a change that's set to take place in mid-September. Again, if everyone's looking for any news about that change or specific questions, you can always go to direction.com to learn more. One final question, Mo, before you take off. With 10 out of 11 S&P 500 sectors up this year, it might be 11 last time I checked. We're close, but bulls are very much in control. The top three performing S&P 500 sectors as far as industry groups, you've got technology, communication services, the industrial sector. We've also got the healthcare group, which has been a laggard making some noise. Does Direction offer ETFs targeting these particular industry groups?
Spot on, Ron. We do offer end investors both a breadth in terms of our single stock offerings as well as across more diversified strategies or sectors or industries. That's really where our business began in 2007 and 2008. You have spotlighted that so far this year, the bulls have won out, and it's an open question in terms of if that will be the finishing order, but we've seen interest from traders on both sides. We look across our sector lineup and industries in particular. Maybe there's a few I would highlight. I think within healthcare, a few tickers to remember, cure and pill, for expressing a view on either side of the healthcare industry as a whole or the sector. Then if you look within it, we're seeing continued interest despite some of the challenges from a political standpoint towards biotech. Lab U and lab D, U indicating being a bull and D being bearish, two considerations as well for the biotech sector.
We'd be hard-pressed not to mention two of our flagship strategies, which are tech L and tech S on technology. For those looking to take a decision on either side of the technology sector or within that, very clearly the thing that's continuing to drive our global economy and particularly in the US, semiconductors, are areas of continued interest from our trading community. Stepping completely outside, I would note something even like homebuilders. As we're thinking about a change in interest rates and mortgage rates seem to have come down more recently, home builders may be benefiting from that. There's inventory questions that still linger in the housing market, but something like nail is a consideration for an active trader who's looking to express a view on the bullish side of home building. Again, what one can expect when they come to Direction is a number of opportunities, whether it's for concentrated exposure, say in single stock, where you're really looking to play news sentiment earnings that are out there on an individual company to more diversified baskets where you have an opportunity to express a view towards any given sector or industry. We're excited to bring more to market later this year, and I look forward to a conversation to discuss those. Good stuff. Well, thank you, Mo, for taking the time and for your excellent insights. We'll see you soon. Thanks, Ron.
Be sure to visit direction.com to learn more about Direction's ETF lineup. Get news updates along with education for traders. I'm Ronda Ley. Thanks for watching. Don't forget to hit the subscribe button, and we'll see you next time.
