GraniteShares has launched the world’s first leveraged single-stock ETPs on Chinese electric vehicle manufacturer NIO.
The GraniteShares NIO 3x Long ETP (3LNI) and GraniteShares NIO 3x Short ETP (3SNI) are listed on the London Stock Exchange with total expense ratios (TER) of 0.99%.
The launches follow stellar performance by the company in 2020 with increased support for electric vehicles (EVs) among consumers and investors seeing NIO shares rise by more than 1,200% over the trailing 12-months to 29 March.
This momentum could continue going forwards with the company eyeing launches in Europe and North America. NIO accounted for 46% of all EV sales in Europe in 2020.
Furthermore, the Chinese government is mulling a quota of 60% of all new car sales having to be electric by 2035, a move which would directly impact the order books of domestic EV manufacturers such as NIO.
However, it is also worth considering NIO’s considerable volatility and downside risks. Having seen its orders more than doubled year-on-year in 2020, investors eagerly priced in the company’s future potential.
Since hitting its most recent peak in early February, the company’s shares have dropped by 42.5% in under seven weeks.
At their current level, NIO shares are worth little over half of the downwardly revised $70 price target issued by JP Morgan analysts. However, investor hype means the company’s valuation still looks inflated versus more established picks such as Volkswagen, Ford, and General Motors, all of which will gradually expand their EV and hydrogen offerings in future.
Will Rhind, founder and CEO at GraniteShares, commented: “Often dubbed the Tesla of China, [NIO is] a stock we have been consistently asked for by investors.
“Electric vehicle stocks have really captured the trading zeitgeist of the last 12-15 months and investors naturally want the ability to play both sides of the story.”
In addition to launching 3NLI and 3SNI, the company has reintroduced the GraniteShares Rolls Royce 3x Short ETP (3SRR), having closed the product last year due to what it described as ‘extreme’ share price volatility.
The launch of its NIO products follows the recent introduction of its tech mega-cap ETP suite, which seeks to offer leveraged and unleveraged exposures in companies such as Google, Amazon, Apple, Tesla, Microsoft, Facebook, and Netflix:
GraniteShares 1x Short FAANG Daily ETP (SFNG)
GraniteShares 3x Long FAANG Daily ETP (3FNG)
GraniteShares 3x Short FAANG Daily ETP (3SFG)
GraniteShares 1x Short GAFAM Daily ETP (SGFM)
GraniteShares 3x Long GAFAM Daily ETP (3GFM)
GraniteShares 3x Short GAFAM Daily ETP (3SGF)
GraniteShares 1x Short FATANG Daily ETP (SFTG)
GraniteShares 3x Long FATANG Daily ETP (3FTG)
GraniteShares 3x Short FATANG Daily ETP (3SFT)