The rapid expansion of leveraged single-stock ETFs in the U.S. appears to be losing momentum as asset managers scale back amid signs of market saturation and weak investor adoption.
Asset managers debuted 244 leveraged ETFs by mid-August, surpassing the 229 launched in all of 2025, but the average fund size has fallen sharply to $63.3 million from $272.2 million at the end of 2024. Half of the new funds now hold less than $7 million in assets, well below the $50 million to $100 million threshold typically needed for long-term viability, according to industry data.
The slowdown follows a surge in launches tied to high-profile stocks such as Nvidia, Tesla, and Alphabet during the first wave of growth. Morningstar reported 63 closures of leveraged single-stock funds in the U.S. in 2026 alone, compared with just three in 2025. The shakeout accelerated after Lucid Group’s shares plunged 51% in a single day on July 14, forcing the liquidation of a GraniteShares 2x leveraged ETF linked to the electric vehicle maker.
Industry analysts and executives cite a maturing market where a handful of top firms dominate inflows while a long tail of smaller products struggles to attract capital. Daniel Sotiroff, an analyst at Morningstar, noted that the market is saturated, with only a few firms commanding the bulk of assets. Elisabeth Kashner, director of global funds research at FactSet, added that issuers are no longer focusing on the largest or most stable companies, instead targeting smaller or untested stocks.
Will Rhind, CEO of GraniteShares, said the firm actively evaluates its fund lineup and closes products that fail to meet adoption thresholds. Matt Markiewicz, head of product and capital markets at Tradr ETFs, said the company continuously assesses its suite to align with investor demand. Meanwhile, startups like Corgi Invest have entered the space aggressively, launching 127 leveraged or inverse single-stock products so far in 2026, though their average assets under management stand at just $1 million.
Amrita Nandakumar, president of Vident, described the current phase as the end of a second wave of expansion, where successive waves increasingly target speculative or pre-IPO names. Emily Yuan, founder of Corgi Invest, argued that lower fees and product quality will eventually attract assets despite the current low average fund sizes.
