One of the year’s hottest investments? Bitcoin, which has surged on exchange-traded fund adoption as well as the return of the “Trump trade.” One way to go especially big on that bet is two new leveraged ETFs: MSTX and MSTU, which are 2X MicroStrategy—a company that’s already a highly exposed Bitcoin proxy.

Both ETFs effectively give investors a 4X exposure to Bitcoin. If that sounds volatile, it is: MSTX is the most volatile ETF in the US. Consider this space the “ghost pepper” of hot sauces.

On this episode of Trillions, Eric Balchunas and Joel Weber speak with Sylvia Jablonski, the CEO and CIO of Defiance ETFs—the issuer behind MSTX. They discuss how the product came into existence, what the Trump trade has meant for inflows, why there’s a modest rivalry with MSTU already, how investors are using options on the product and what makes a good “ghost pepper.”

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As with humans, death is a part of life in the exchange-traded fund industry. There have been about 150 closures this year, which may be a bit surprising given how almost everything is up in the markets. So what’s behind this year’s class of liquidated ETFs? And what does it mean for investors? 

On this episode of Trillions, Eric Balchunas and Joel Weber dig into the stories and answer the “why” behind some of the closures in 2024. On hand to assist is Vildana Hajric, a cross-asset reporter for Bloomberg, and Todd Rosenbluth, head of research at VettaFi.

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Derivatives-enhanced exchange-traded funds have become a hit with retail investors. There’s been more than 160 such launches so far this year, with monikers such as “laddered buffer” and “covered call,” and they’ve attracted $50 billion and counting. While many of the products were designed to protect from downturns, some include options that can generate cash, which comes back to investors in the form of dividends. (Did someone say “yields”?)

On this episode of Trillions, Eric Balchunas and Joel Weber speak with Denitsa Tsekova and Vildana Hajric, Bloomberg cross-asset reporters who wrote a recent feature story about this new retail boom. The group is also joined by Todd Akin, a retail trader behind the Unconventional Wealth Ideas YouTube channel and one of the characters in their story. They discuss why these ETFs have become so popular, how they work—and what the risks are.

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A new competition has begun to see who can successfully solve an investing paradox: how to package illiquid, private assets into liquid, public exchange-traded funds. State Street, in partnership with Apollo, officially kicked off this race with a recent filing. If approved, their offering would make one of Wall Street's fastest-growing corners—private credit—open to a much wider world than just institutional investors.

On this episode of Trillions, Eric Balchunas and Joel Weber speak with Vildana Hajric, a cross-asset reporter at Bloomberg News, about the details of the filing, why more filings are expected, what to know about Apollo’s “liquidity backstop” and why all of this is such a potential game-changer. 

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For every stock that enters an index like the S&P 500 or Russell 1000, another must exit. One might assume these “deletions” are a sorrowful bunch whose demotion to the B-team means they’re no longer worthy of your portfolio. Yet Rob Arnott, founder of Research Affiliates and a longtime champion of “smart beta,” discovered that many of these rejects tend to perform better after being dropped from the indexes.

On this episode, Eric and Joel speak with Arnott about his new exchange-traded fund, $NIXT, which holds dozens of such stocks with equal-weighting. They discuss how the ETF—Arnott’s first launch—may complement your portfolio, what’s behind the performance, how the portfolio rebalances and why smart beta has endured.

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The idea of using leverage to layer one investment return, say equities, on top of another, say a managed futures strategy, is something institutional investors have been doing for decades under the term “portable alpha.” Now a suite of young, fast-growing exchange-traded funds have come along—they’re called “return stacking” ETFs—and they’re offering such layering to the masses.

On this episode, Joel and Eric speak with Corey Hoffstein, chief executive and chief information officer of Newfound Research and one of the masterminds behind the Return Stacked ETF suite. They discuss how these ETFs work, where they fit in a portfolio and why this is a more responsible use of leverage than the kind that blew up the market in 2008. 

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While exchange-traded funds have become increasingly popular and people are more familiar with them, there are still aspects of ETFs that—for some—remain shrouded in mystery. So we recently asked our followers on social media to send us any ETF questions they may have or topics they were curious about. We received a ton of responses. 

On this episode of Trillions, Joel Weber and Eric Balchunas answer about 20 of these questions—ranging from whether ETFs will be in 401(k) plans someday to how overnight trading works to our thoughts on some of the new iterations of ETFs, like buffers, return stacking and crypto. 

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Bitcoin exchange-traded funds, which were finally introduced earlier this year after intense regulatory scrutiny, have already become some of the most successful ETF launches ever. For months it seemed that spot ETFs for Ether, the second-largest cryptocurrency, might linger in a similar purgatory — and then, after some back and forth with issuers, regulators finally blessed them. About 10 products began trading in mid-July; they've seen healthy inflows, though Bitcoin ETFs were in a different league.

On this episode of Trillions, Eric Balchunas and Joel Weber welcome stacy-marie ishmael, an executive editor at Bloomberg News who oversees crypto, digital payments and cross-asset coverage, to the podcast. They discuss the differences between Bitcoin and Ether, what happened during the approval process, how the various Ether ETFs compare, what we've learned since their launch, and what this might mean for future crypto ETFs.

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Nvidia's ascent into one of the world's biggest companies was as fast as it was dramatic. The company's startling rise has sparked new ETFs to launch and propelled others to record heights. Nvidia's dominance is also changing indexes and weightings, which can have a dramatic impact on investors—especially when a rebalance gets a little wild.

On this episode of Trillions, Eric Balchunas and Joel Weber speak with Athanasios Psarofagis of Bloomberg Intelligence and Emily Graffeo of Bloomberg News about the myriad ways Nvidia is impacting the ETF universe. They also reveal which ETFs have outperformed without a boost from Nvidia.

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Single-stock ETFs seem like an oxymoron: An investing vehicle that usually contains an entire portfolio reduced to just a single company? But whatever skepticism existed when this type of ETF — which are either leveraged or inverse — first launched two years agoCHTK has abated. Traders are hooked on this type of ETF "hot sauce," even if it sounds a lot like gambling. Assets in single-stock ETFs have doubled in assets this year, to more than $5 billion. The most popular such ETF, GraniteShares 2x Long NVDA Daily ETF ($NVDL), takes Nvidia's performance — an incredible upward trajectory of late — and doubles it. (Its daily volume usually exceeds most blue-chip stocks.) You can also go short with the GraniteShares 2x NVDA Daily ETF ($NVD). 

On this episode of Trillions, Eric Balchunas and Joel Weber explore single-stock ETFs with Will Rhind, the founder and CEO of GraniteShares, which currently has about a dozen such offerings. They discuss how the ETFs work, who uses them, what the risks are, why enthusiasm for a given stock is so important, and where this interesting new category — and the "Vanguard-free zone" — could go from here. 

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So far, this has been a banner year for exchange-traded funds. The S&P 500 is at record highs, inflows keep soaring and investors are taking more risk. BlackRock’s Bitcoin offering even became the most successful ETF launch ever.

On this episode, Eric Balchunas and Joel Weber discuss the most noteworthy themes and trends of the past six months with Todd Rosenbluth and Cinthia Murphy of VettaFi. They review what the inflows reveal, how various sectors are performing and which products and issuers have been the biggest winners and losers. They also talk about what to watch for in the second half of the year.

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