US leveraged single-stock ETF boom may be cooling

• Half of the 474 leveraged ETFs now hold less than $7 million in assets, well below the $50-100 million threshold analysts say funds need to survive their first year or two
• A record 244 leveraged ETFs launched by mid-August 2026, but successive waves are 'scraping the bottom of the barrel' by targeting smaller companies and even pre-IPO firms
• Despite widespread closures, some firms like Corgi Invest remain undeterred, having launched 127 new products this year with plans for more, betting that lower fees will attract investors

Summary

The high-risk leveraged single-stock ETF market in the US shows signs of cooling after explosive growth. According to Morningstar, 63 leveraged single-stock funds closed in 2026 compared to just three in 2025, signaling market saturation.

Key Data Points:

• Average leveraged ETF assets plummeted from $272.2 million at end-2024 to $63.3 million currently
• Half of 474 leveraged ETFs hold less than $7 million in assets
• Industry survival threshold: $50-$100 million in assets within first 1-2 years
• Record 244 leveraged ETFs launched by mid-August 2026 versus 229 in all of 2025

Market Evolution:

The market has experienced two distinct waves. The first wave targeted large, volatile companies like Nvidia, Tesla, and Alphabet. The second wave, beginning last year, focuses on smaller, more speculative companies—some targeting firms not yet public or recently launched AI-themed ETFs.

Notable Examples:

• Granite Shares' NVDL (Nvidia-linked) remains successful at $3.9 billion in assets
• Tradr ETFs closed MongoDB and Datadog products after sector selloffs
• Granite Shares shuttered its Lucid Motors ETF following the EV manufacturer's stock collapse

Market Outlook:

Analysts cite oversaturation, with Morningstar's Daniel Sotiroff noting "only so much money out there chasing this kind of product." Despite challenges, some remain optimistic—Corgi Invest launched 127 new products in 2026, betting lower fees will attract investors. However, industry experts like Vident's Amrita Nandakumar warn successive launches are "scraping the bottom of the barrel," targeting increasingly untested stocks.