Reading ETF listings is normally a sober affair. Bond funds, currency hedged share classes, the occasional thematic ETP with an earnest acronym. Most days the strangest thing in the file is a Luxembourg domiciled accumulating share class with a fee structure that differs from the distributing version by a single basis point.
This batch is not most days.
Cerebras Systems went public very recently in what was, by a comfortable margin, the largest US tech IPO of the year. The stock opened well above its IPO price, closed up almost 70 percent on its first session, and then promptly started selling off the next morning. By all standard measures of corporate maturity, the company has been a publicly traded entity for somewhere between “a fortnight” and “long enough to receive a welcome card from Nasdaq.”
Tradr, undeterred, has now launched both a 2X long daily ETF and a 2X short daily ETF on the name. In the same batch. On the same exchange. On the same morning.
I find this oddly poetic. The product development team has, in effect, refused to take a view. They have instead built a small leveraged casino around a single newly public AI chip company and invited the rest of us to pick a side. Whatever happens to Cerebras over the next year, Tradr is now contractually obligated to be the most enthusiastic participant in either direction.
An autocallable, for those who have managed to avoid structured products at a private bank, is a payoff profile that pays you a defined coupon while the underlying behaves itself, and pays you considerably less than the price of admission if it does not. Wrapping an autocallable inside an ETF is itself an interesting choice, since the historical selling point of an autocallable was that it was private, bespoke, and slightly mysterious.
Wrapping that autocallable around Marathon Digital, a Bitcoin mining company whose share price moves like a kite in a hurricane, is bolder still. Wrapping a second one around Super Micro Computer, a stock that has spent the past couple of years alternating between AI server euphoria and forensic accounting concern, takes the choice from “bold” to “deeply committed.”
The structure is, technically, fine. The names underneath it, less so.
Canadian retail investors can shortly access two times daily leveraged exposure to Robinhood, Meta Platforms, and Palantir Technologies via the Toronto Stock Exchange. These are three of the most enthusiastically owned, fervently discussed, and emotionally held single names in modern equity markets.
The implicit theory of the product is that one times exposure to a stock that has already roughly doubled or tripled over recent periods is insufficient. The explicit theory is that some people will buy this. The two theories rarely contradict each other in practice.
The framework here is built around a single question: is this company making something the world cannot live without? Keith Fitz-Gerald, the namesake, has been refining the approach for more than four decades, which is genuinely a long time and lends the product a seriousness the name almost works against.
The actual composition, now visible, is more interesting than the title suggests. There are 28 names, weighted between roughly five and one percent. The top of the book reads predictably enough for the era: Nvidia, Apple, JPMorgan, Tesla, Palantir, AMD, Broadcom, Microsoft. The Magnificent Seven by another name, plus a bank, plus the software company that is in approximately every thematic ETF launched this decade.
The middle and lower book is where the framework actually does some work. The fund holds Lockheed Martin and RTX (defence), Chevron, ExxonMobil, and Kinder Morgan (energy and the pipelines that move it), Eli Lilly, AbbVie, and Gilead (pharma), Walmart, Costco, and Procter and Gamble (the unglamorous backbone of household demand), plus GE Vernova for the power grid and CrowdStrike for the obligatory cybersecurity slot. My personal favourites are CareTrust REIT and Waste Management. The world cannot live without elder-care facilities or, less romantically, the people who take the bins out. There is a quiet wit in including both at meaningful weight.
Two names stood out for different reasons. The fund holds Rocket Lab, which is a useful note given everything else we are about to discuss on space-adjacent listings. It also holds IonQ, the quantum computing name whose volatility famously caused at least one previous leveraged ETP wrapped around it to be wound down. Apparently IonQ is must-have, just not at three times leverage.
The most charming detail is buried at the bottom. Procter and Gamble, the company that makes Tide, Pampers, Crest, Gillette, and roughly half of every supermarket shelf on the planet, sits at under one percent. If anything in this portfolio is the textbook definition of “must have,” it is the company that owns the toothpaste aisle. The framework has decided that being indispensable is necessary but not sufficient. You also have to be growing.
This one is the academic in the room. The strategy buys companies that have just been added to major indices, on the long-standing observation that index inclusion produces a measurable but temporary price effect as passive flows arrive. The trade is not a secret. It has been written about, traded around, and partially arbitraged away for the better part of two decades. Wrapping it in an ETF is a perfectly reasonable thing to do, and also a small confession that an effect this well-known is now retail product.
It is also about to be tested by the largest single index addition event anyone alive has seen. SpaceX is preparing to go public at a valuation north of the entire market capitalisation of most national stock markets, and the major US index providers are, in real time, rewriting their inclusion rules to let it in faster. Nasdaq has already cut its waiting period for megacap newcomers from quarters to a fortnight. S&P Dow Jones is consulting on a similar set of changes, including the small matter of relaxing the longstanding profitability requirement and the public float threshold for very large companies. Index fund managers may, by some estimates, have to absorb roughly a fifth of the available float inside six months.
A fund whose entire premise is “buy what the indices just added” is about to be handed the cleanest, largest, and most policy-engineered test case in the history of the index addition effect. Whether the effect survives being designed around a single company is, I suspect, the more interesting question. The Hedgeye ETF will at least be sitting in the front row to find out.
Bernie Thurston is CEO of Ultumus. He reads new listing files, so you don't have to. These are observations, not investment advice.