March 7 (Reuters) -

Investors have piled into Nvidia ( NVDA )-focused exchange-traded

funds (ETFs) this year on the frenzy around AI, with inflows

into a bullish fund that tracks the shares of the chip designer

hitting an all-time high on Wednesday.

Net daily inflows into the GraniteShares 2x Long NVDA Daily

ETF ( NVDL ) hit a record of $197 million, according to LSEG

Lipper data. The assets managed by the ETF have grown to $1.41

billion from $213.75 million at the start of the year.

WHY IT'S IMPORTANT

Risk-averse investors have largely stayed away from

leveraged ETFs tracking single stocks that aim to provide

returns over extremely short periods.

These ETFs, which made their U.S. debut in 2022, have become

popular among speculators looking to bet on the most volatile

shares based on earnings and other news.

CONTEXT

Nvidia ( NVDA ), which controls about 80% of the high-end AI

chip market, has surged nearly 82% since the start of the year

after a stellar forecast and amid renewed euphoria around AI.

Leveraged single-stock ETFs seek to amplify the returns of

an underlying stock for a single day, generally by two or three

times, using financial derivatives and debt as leverage.

KEY QUOTES

"Nvidia ( NVDA ) has been the hottest stock in 2024 and many

investors are eager to seek out higher returns in exchange for

added risk," said Todd Rosenbluth, chief ETF strategist at

VettaFi.

"We expect to see continued demand for single stock

leveraged ETFs as a new wave of must-own companies emerge."

THE NUMBERS

Net monthly inflows into leveraged ETFs tracking Nvidia ( NVDA ) such

as the GraniteShares 2x Long NVDA ETF, the Direxion Daily NVDA

Bull 1.5X Shares ETF and the T-Rex 2X Long Nvidia Daily

Target ETF hit a record in February.

The GraniteShares ETF has already crossed its net monthly

flow record within the first six days of the month.

Assets of the three Nvidia ( NVDA )-linked ETFs jumped between five

and 11 times since the start of 2024, while their prices are up

between 143% and 218% year-to-date, outperforming other ETFs.