Generated July 2026 from current fund data.
Overview
NVDA is NVIDIA's common stock—a direct equity holding in a semiconductor and AI infrastructure leader. NVDU is a leveraged ETF that amplifies NVDA's daily moves by 1.5x through derivatives, aiming to deliver 150% of NVDA's daily performance. The funds track the same underlying company but with fundamentally different mechanics: NVDA is buy-and-hold equity; NVDU is a tactical, rebalancing vehicle designed for short-term directional bets.
How they differ
The core difference is leverage. NVDU uses daily rebalancing and derivatives to achieve 1.5x notional exposure to NVDA; it carries a beta of 3.6235 versus NVDA's 2.211, reflecting that amplification. That leverage compounds daily, not just annually, which means NVDU's long-term performance will diverge from NVDA's return simply due to path dependency—especially in volatile markets.
Yield tells another story. NVDA distributes 0.47% quarterly, while NVDU yields 2.11%, a much higher payout rate that reflects its structure rather than NVIDIA's underlying fundamentals. NVDU charges a 1.04% expense ratio to cover the cost of maintaining leverage daily; NVDA has no fund fee. NVDU is much smaller, with $634M in AUM versus NVDA's massive scale, and it's newer—launched in September 2023—compared to NVDA's listing in January 1999.
Who each is best for
NVDA: Fits investors with a multi-year or longer horizon who want direct ownership of a leading AI and data-center semiconductor company and are comfortable with stock-level volatility (beta 2.2+) in exchange for capital appreciation potential and modest dividend income.
NVDU: Fits tactical traders and shorter-duration allocators who expect near-term strength in NVDA and are willing to accept daily rebalancing drag and decay in sideways or down markets in pursuit of magnified upside capture on daily moves.
Key risks to know
- Compounding decay in choppy markets. Leveraged ETFs reset daily. In volatile sideways action, the fund can lose value even if NVDA ends the period flat, because gains and losses compound at 1.5x each day. Extended low-volatility periods mask this; high-turnover periods expose it sharply.
- NAV erosion from the expense ratio and daily rebalancing costs. NVDU's 1.04% annual fee, combined with the hidden cost of daily rebalancing in and out of derivatives, erodes returns relative to NVDA over months and years. The higher the underlying volatility, the worse this drag.
- Single-stock concentration risk, amplified. NVDU has all its capital tracking one company. A negative catalyst in NVIDIA (regulatory action, a missed product cycle, competitive loss) hits three times as hard in NVDU as in NVDA due to leverage. There is no diversification buffer.
- Counterparty and derivative risk. NVDU relies on swap agreements and other derivatives to deliver its leverage. While Direxion is well-established, derivative counterparty stress or market dislocations can disrupt the fund's ability to rebalance, especially in sharp market moves.
- Smaller AUM and potential liquidity constraints. At $634M, NVDU is significantly smaller than NVDA. A sharp outflow or need to liquidate large positions could widen spreads and create execution costs not reflected in quoted prices.
Bottom line
If you want direct exposure to NVIDIA's long-term AI and data-center opportunity with minimal fees and no leverage decay, NVDA is the straightforward choice. If you're making a short-term tactical bet on NVIDIA strength and understand that leverage and daily rebalancing will cost you in sideways or extended sideways markets, NVDU offers amplified upside capture—at the cost of complexity and hidden drag. Neither choice is inherently "better"; it depends on your time horizon and willingness to tolerate leverage mechanics. Past performance does not predict future results.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
