Will Rhind is the Founder and CEO of GraniteShares, an independent ETF issuer, headquartered in New York City.

GraniteShares seeks to launch innovative and disruptive ETF investments. Will is an established commodities expert and ETF entrepreneur with more than 20 years of experience in the industry. He was formerly a Principal at iShares and one of the original team members in Europe. He also served as Head of ETF Securities in the U.S. and CEO overseeing the world’s largest commodities fund, the SPDR GoldShares ETF (GLD).

GraniteShares is an entrepreneurial ETF provider focused on providing innovative, cutting-edge alternative investment solutions. It was founded in 2016 by Will Rhind, a well-known figure in the ETF industry, with backing from Bain Capital Ventures and other leading ETF investors. GraniteShares listed its first ETF in the United States in 2017, and its U.S. ETF offerings include a broad-based commodity index fund, physically-backed gold and platinum funds, a high-income pass-through securities index fund, and a large-cap U.S. equity index fund. Most recently, GraniteShares has introduced a suite of single stock ETFs that provide investors with high-conviction exposure to the most popular and widely traded U.S. companies, including Nvidia, Tesla, Meta, Apple, among others.

In 2019, GraniteShares officially launched its European business in London, introducing a new category of exchange-traded products: collateralized, short and leveraged single-stock exposure to a range of blue chip companies listed in the UK. These products are listed on the London Stock Exchange.

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In this episode of the “How to Trade It” podcast, Casey Stubbs interviews Will Rhind, the founder and CEO of GraniteShares. They dive into the world of Exchange Traded Funds (ETFs) and discuss how GraniteShares specializes in high-conviction ETFs, including leveraged single-stock ETFs. Will Rhind provides insights into the mechanics of these ETFs and their potential benefits and risks. He also touches on topics like fees, trading strategies, and the global reach of ETFs.  You don’t want to miss it!

Show highlights include…

Understanding Leveraged ETFs 

• Will Rhind explains the concept of leveraged ETFs.
• The goal of leveraged ETFs is to provide a multiple of the daily return of an index.
• Example: A 2x leveraged ETF aims to provide twice the daily return of the underlying index.

Benefits of Leveraged ETFs 

• Leveraged ETFs allow traders to potentially amplify their returns with a smaller investment.
• Will discusses how leveraged ETFs can be used for both long and short positions.
• The importance of understanding leveraged ETFs and their inherent risks.

Market Environment and Active Management 

• Will emphasizes that leveraged ETFs are actively managed funds.
• Market examples to illustrate the active management aspect.
• How investors can use leveraged ETFs for directional views on stocks based on their bullish or bearish outlook.

Three Key Points:

• Leveraged ETFs provide an opportunity for traders to amplify returns with a smaller investment, but they come with inherent risks.
• Leveraged ETFs can be used for both long and short positions, allowing investors to profit from market movements in either direction.
• These funds are actively managed, and their performance depends on the daily returns of the underlying index, making them suitable for traders with a short- to medium-term outlook.

Shorting with Leveraged ETFs 

• Will explains how shorting with leveraged ETFs works, emphasizing the need to borrow the underlying shares.
• Discusses the potential risks of shorting in traditional markets versus using leveraged ETFs for short exposure.

Risk Management with Leveraged ETFs 

• Will addresses the potential risks involved with short trading and how they differ when using leveraged ETFs.
• Explains that leveraged ETFs limit losses to the initial investment amount, avoiding the possibility of unlimited losses.

Hedging and Market Environment

• Will discusses the use of leveraged ETFs for hedging in a market environment.
• Example of using leveraged ETFs to hedge a long position in a stock like Tesla.
• The importance of recognizing market volatility and adjusting trading strategies accordingly.

Long-Term Viability of Leveraged ETFs 

• Will addresses concerns about the long-term viability of leveraged ETFs, especially in markets that tend to trend upward.
• Highlights the critical mass of assets and maintaining fund profitability as key factors for long-term viability.

GraniteShares’ Range of Products

• Will mentions some of GraniteShares’ ETF offerings, including NVDL (Nvidia), FBL (Facebook/Meta), Babx (Alibaba), Conel (Coinbase), AAPB (Apple), and AMD S (AMD).

Compounding Returns and Risks

• Discussion on compounding returns and how leverage can amplify both gains and losses.
• Emphasizes the need for investors to manage risk and calculate potential losses when using leveraged ETFs.

High Yield ETFs

• Will introduces HIPPS, a high-yield ETF by GraniteShares.
• Explains how HIPPS offers exposure to pass-through securities and provides a fixed monthly cash distribution.

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ETFs…what are they?

Exchange-Traded Funds (ETFs) are investment funds that are traded on stock exchanges, much like individual stocks. They offer a way for investors to buy a diversified portfolio of assets, such as stocks, bonds, commodities, or other securities, in a single investment product. ETFs are designed to track the performance of a specific index, commodity, or asset class and aim to replicate its returns.

Key characteristics of ETFs include:

1. Diversification: ETFs provide exposure to a broad range of underlying assets, reducing the risk associated with investing in individual securities.
2. Liquidity: ETFs can be bought and sold throughout the trading day on stock exchanges, making them highly liquid investments.
3. Transparency: ETFs typically disclose their holdings daily, allowing investors to see the assets they own within the fund.
4. Low Costs: ETFs are known for their cost efficiency, often having lower expense ratios compared to traditional mutual funds.
5. Tax Efficiency: ETFs can be tax-efficient because they are structured in a way that minimizes capital gains distributions.
6. Flexibility: Investors can use ETFs to gain exposure to various asset classes, sectors, and geographic regions.
7. Intraday Trading: Unlike mutual funds, ETFs can be bought and sold at market prices throughout the trading day, allowing investors to take advantage of intraday price movements.
8. Dividend Payments: Many ETFs distribute dividends to investors on a regular basis, providing potential income.

There are different types of ETFs, including:

• Equity ETFs: These track a specific stock index or a basket of stocks, offering broad or sector-specific exposure to the equity market.
• Fixed-Income ETFs: These invest in bonds and other fixed-income securities, providing income and potentially lower risk compared to stocks.
• Commodity ETFs: These track the price of commodities like gold, oil, or agricultural products, allowing investors to gain exposure to commodity markets.
• Currency ETFs: These track the exchange rates of foreign currencies and can be used for currency hedging or speculation.
• Inverse and Leveraged ETFs: These are designed to provide the opposite (inverse) or magnified (leveraged) returns of an underlying index or asset class, often used for short-term trading or hedging strategies.

It’s important for investors to understand the specific characteristics and risks associated with each ETF they consider, as the performance of an ETF is directly tied to the performance of its underlying assets or index. Additionally, investors should carefully evaluate their investment goals and strategies before choosing an ETF that aligns with their objectives.

Connect with Will Rhind:

• Website:  https://graniteshares.com/institutional/us/en-us/
• Twitter:  https://x.com/willrhind
• LinkedIn:  https://www.linkedin.com/in/william-rhind-5434367/

Connect with Casey:

• Website:  https://caseystubbs.com
• YouTube:  https://www.youtube.com/TradingStrategyGuides
• YouTube:  https://www.youtube.com/caseystubbs
• Facebook:  https://www.facebook.com/TradingStrategy
• LinkedIn: https://www.linkedin.com/in/caseystubbs
• Twitter: https://x.com/caseystubbs316
• TradingStrategyGuides.com: https://www.tradingstrategyguides.com/
• Global Prop Trader: https://globalproptrader.com
• Email: [email protected]

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Disclaimer: Trading carries a high level of risk, and may not be suitable for all investors. Before deciding to invest you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment. Therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.