Hi! In this week’s ETF Wrap, you’ll get a look at the wave of single-stock ETFs that have recently hit the market — and whether they may be geared toward your investment approach. Please send feedback and tips to email@example.com. You can also follow me on Twitter at @cidzelis and find me on LinkedIn.
Single-stock ETFs have made a big splash in the exchange-traded-fund industry, but they’re not for everyone. “These single-stock ETFs are day-trading tools,” said Nate Geraci, president of wealth management firm The ETF Store, in a phone interview. They should only be used by “sophisticated traders” but “where they’re going to end up is in the hands of unsophisticated retail investors,” he said. “I do worry about that.” Last month, AXS Investments announced that it was launching the first single-stock ETFs in the U.S., offering investors a way to make bearish or bullish bets on such companies as Tesla Inc
, Nvidia Corp.
PayPal Holdings Inc.
and Pfizer Inc.
They’re not meant to express long-term investment views and they’re risky, as investors could lose all their money on a wrong way bet. Single-stock ETFs are for “active traders who are looking to make very short-term, higher-conviction trades” while understanding that the funds are “reset on a daily basis,” said G …