An ETF managed by YouTube financial personality Kevin Paffrath is closing, in part, after Paffrath bet that interest rates would continue falling, and he says, after overextending himself with real estate and other projects.
The Meet Kevin Pricing Power ETF (PP), with $34.5 million in assets, will liquidate by Feb. 28, according to a statement from Tidal Financial Group, which issued the exchange-traded fund in November 2022 under its previous name Toroso.
The fund, started with $500,000, performed well initially thanks partly to Paffrath’s ability to reach more than two million YouTube subscribers, as well as bets on Apple Inc. (AAPL) and Tesla Inc. (TSLA) In a video posted Feb. 11, Paffrath said assets soared to around $50 million.
After a September interest rate cut, Paffrath bet on falling interest rates. The Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF), a high-risk fund that aims to provide outsized returns on bets on U.S. Treasury Bonds, replaced tech companies as PP’s top holding with a nearly 16% allocation. Interest rates have climbed, crushing Paffrath’s bets.
PP’s price was unchanged over the past year, compared with a 22% gain in the SPDR S&P 500 ETF Trust (SPY).
The father of seven, whose website lists his real estate companies and educational courses along with photos of him with a Tesla Cybertruck and a private jet, said in a tweet that he had overextended himself.
“I took on too much,” he wrote on X, saying his priorities are his family, YouTube classes and his HouseHack business. “I made a mistake expanding into too much too quickly.”
He said he lost a personal investment of around $1 million due to fees, lawyers and other costs associated with running the fund.
Paffrath also cited interference from his partners without mentioning Tidal or other firms. He said the partners’ rules forbade him from doing things like boosting the size of his bets on Tesla, and they also didn’t execute trades as quickly as he would have wanted.
