To The Moon

Tesla’s resurgence as a powerhouse stock is putting one fund on a trajectory to become the first billion-dollar single-stock ETF. The Direxion Daily TSLA Bull 1.5X Shares (TSLL) had nearly $700 million in assets under management as of June 8, a figure that doesn’t include a 5% surge in the stock on Friday.   $Direxion Daily TSLA Bull 1.5X Shares(TSLL)$

The 10-month-old fund is far and away the largest U.S.-listed single-stock ETF on the market today. Two other funds are around the $100 million in AUM mark: The AXS 1.25X NVDA Bear Daily ETF (NVDS) and the AXS TSLA Bear Daily ETF (TSLQ), while the GraniteShares 1.5x Long NVDA Daily ETF (NVDL) has around $60 million in assets.  $NVIDIA Bear 1.25X ETF-AXS(NVDS)$

  $GRANITESHARES 1.5X LONG NVDA DAILY ETF(NVDL)$

TSLL’s success can be attributed to a combination of rapid price appreciation in Tesla’s stock since the start of the year, along with strong money flows into the ETF. 

Since its inception on Aug. 9, 2022, investors have pumped $482 million into TSLL. The ETF’s price is down by 32% since that date (2.5x TSLA’s 12.7% decline—ouch). 

But it’s up by a whopping 219% since TSLA’s low point on Jan. 3 (versus 129% for TSLA itself).

After losing nearly three-quarters of its value between November 2021 and December 2022, Tesla stock has regained some of the magic that characterized its meteoric ascent in 2020 and 2021.  

On Friday, the stock was on track for its 11th-straight gain thanks to news that rival automaker General Motors will use Tesla’s electric vehicle charging technology.  

While returns for leveraged ETFs are path dependent, a 15% to 20% rise in Tesla’s stock from here combined with some modest inflows could be enough to propel TSLL above the $1 billion AUM mark. 

That would be an impressive accomplishment for an ETF within a brand new ETF category. 

There are currently only 21 leveraged or inverse U.S.-listed ETFs with over $1 billion in assets under management today, the largest of which is the $15.9 billion ProShares UltraPro QQQ (TQQQ).  $Invesco QQQ Trust(QQQ)$

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