AXS Single Stock ETFs
The first leveraged and inverse ETFs in the U.S. exposed to individual stocks
What can you do if you have a short-term view on a particular stock?
AXS was the first firm to launch ETFs that seek inverse and/or leveraged investment results based on the daily performance of high-profile single stocks. Sophisticated investors and traders use our ETFs to short companies without the hassle of borrowing stock or to seek amplified performance when they have high conviction – all with the liquidity, transparency and ease of exchange traded funds. AXS Single Stock ETFs are intended to be used as a short-term trading vehicle by seasoned investors who understand the risks and benefits of these type of funds.
AXS Single Stock ETFs are not suitable for all investors. The Funds are designed to be utilized only by traders and sophisticated investors who understand the potential consequences of seeking daily inverse and/or leveraged investment results, understand the risks associated with the use of leverage and are willing to monitor their portfolios frequently. The Funds are not intended to be used by, and are not appropriate for, investors who do not intend to actively monitor and manage their portfolios. For periods longer than a single day, the Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Fund will lose money even if the underlying stock’s performance decreases over a period longer than a single day. An investor could lose the full principal value of his/her investment within a single day. The Funds track the price of a single stock rather than an index, eliminating the benefits of diversification that most mutual funds and exchange-traded funds offer. Although the Funds will be listed and traded on an exchange, an investment in a Fund may not be suitable for every investor. The Funds pose risks that are unique and complex. To learn more about the additional risks of investing, please see the Important Risk Information section below.
Frequently Asked Questions
What’s the background on single stock ETFs?
The ability to achieve leveraged long and short exposure to individual stocks via an ETF has been available in Europe since 2018. Products there offer investors up to 3x exposure on a single security (i.e., three times leverage). Recent SEC rule changes have allowed this innovative product structure to be made available in the United States. In July 2022, AXS Investments was the first asset manager to launch single stock ETFs, which spawned one of the most significant recent innovations in the exchange traded fund (ETF) industry.
What is the investment objective of single stock ETFs?
Single Stock ETFs seek daily investment results, before fees and expenses, that correspond to either the inverse and/or a leveraged multiple of the daily performance of the common shares of the underlying company.
How do single stock ETFs work?
AXS Single Stock ETFs hold a swap contract, which is a derivative contract issued by an investment bank typically, that provides leverage for the appropriate level of exposure. The leverage resets daily in order to achieve the targeted objective.
Where are they listed?
All of the AXS Single Stock ETFs are listed on Nasdaq.
What type of order should I use?
While a limit order is the most conservative route, it may take longer for your order to get executed. If you have specific questions about a larger order size, please call your financial advisor or feel free to contact us.
What if you hold it longer than a day?
It’s important to be aware that AXS Single Stock ETFs seek to target daily results. Over time, there will be a compounding effect that will lead to a deviation from the cumulative multiplier over time. Beyond a day, the ETFs will lose money if the underlying stock’s performance is flat, and it is possible that the ETFs will lose money even if the underlying stock’s performance decreases over a period longer than a single day.
Who are these intended for?
They intended to be used as short-term vehicles by traders and sophisticated investors who understand the unique risks of seeking daily inverse and/or leveraged investment results. “Sophisticated investors” may include traders, individual investors, financial advisors or small hedge fund managers, ideally active investors with extensive investing experience and the ability to monitor their investments frequently.
How might Single Stock ETFs be used?
Inverse daily ETFs can be effective to provide short exposure to a stock over the short term. Many investors cannot short using traditional means. Single Stock ETFs gets around brokerage restrictions and margin calls and the risk of losing more money than invested.
News & Media
The Fund, the Investment Managers Series Trust II, and AXS Investments LLC are not affiliated with the underlying companies and make no representation as to the performance of the underlying stocks.
Important Risk Information
ETFs involve risk including possible loss of principal. There is no assurance that the Fund will achieve its investment objective. The Funds pose risks that are unique and complex.
Derivatives Risk: The Funds’ use of derivatives may be considered aggressive and may expose the Funds to greater risks and larger losses or smaller gains than investing directly in the reference asset(s) underlying those derivatives. A derivative refers to any financial instrument whose value is derived, at least in part, from the price of an underlying security, asset, rate or index.
Leverage Risk: Leverage increases the risk of a total loss of an investor’s investment, may increase the volatility of the Funds, and may magnify any differences between the performance of the Funds and their underlying stocks. Because the Funds include positive and/or negative multipliers of the performance of the underlying stock, a single day movement in that stock approaching 50% at any point in the day could result in the total loss of an investor’s investment if that movement is contrary to the investment objective of the given Fund, even if the underlying stock subsequently moves in an opposite direction, eliminating all or a portion of the earlier movement. This would be the case with any such single day movements in the stock, even if the stock maintains a level greater than zero at all times.
Compounding Risk: The Funds have a single day investment objective, and performance for any other period is the result of their returns for each day compounded over the period. The performance of the Funds for periods longer than a single day will very likely differ in amount, and possibly even direction, from the intended leverage multiplier of the daily return of the underlying stock for the same period, before accounting for fees and expenses.
Swap agreement risk: A swap is an agreement between two parties to exchange an asset's benefits on a specific date, in an exchange of a series of payments. It is not limited to one type of investment. A swap can be agreed on for stocks, bonds, ETFs, commodities, foreign currencies, or even interest rates. The Fund expects to use swap agreements as a means to achieve its investment objective, which may expose the Fund to greater risks and larger losses or smaller gains than investing directly in the reference asset(s) underlying those derivatives. Swaps are also subject to the risk of imperfect correlation between the value of the reference asset underlying the swap and the swap. The use of swap agreements are also subject to additional risks such as the lack of regulation, counterparty risk, liquidity risk and could expose investors to significant losses.
Concentration Risk: The Fund will be concentrated in the industry assigned to the underlying company (i.e., hold more than 25% of its total assets in investments that provide inverse exposure to the industry). A portfolio concentrated in a particular industry may present more risks than a portfolio broadly diversified over several industries.