Leveraged ETF Overview

Leveraged ETFs are powerful and complex trading instruments that allow traders to magnify the return on investment. While higher returns are an attractive proposition, investors need to realize that losses are magnified too. Thus, these ETFs need to be handled with care.

Leveraged ETFs deliver the desired returns over prespecified periods only (usually one day). A leveraged ETF that offers 2x exposure to the S&P 500 only attempts to do so over one-day holding periods. Investors looking to hold these ETFs for significantly longer time periods can often find themselves losing money even if the underlying benchmark behaved as expected.

With 153 ETFs traded in the U.S. markets, Leveraged ETFs gather total assets under management of $35.27B. The average expense ratio is 1.16%. Leveraged ETFs can be found in the following asset classes:

  • Equity
  • Fixed Income
  • Currency
  • Commodities
  • Asset Allocation
  • Alternatives

The largest Leveraged ETF is the ProShares UltraPro QQQ TQQQ with $3.64B in assets. In the last trailing year, the best performing Leveraged ETF was the USOU at 135.57%. The most-recent ETF launched in the Leveraged space was the MicroSectors FANG+ Index 2X Leveraged ETN FNGO in 08/01/18.

TOP ETF PERFORMERS

UGAZVelocityShares 3X Long Natural Gas ETN28.08%
MLPQETRACS 2xMonthly Leveraged Alerian MLP Infrastructure Index ETN Series B24.11%
TPORDirexion Daily Transportation Bull 3x Shares23.03%
AMJLCredit Suisse X-Links Monthly Pay 2xLeveraged Alerian MLP Index ETN21.82%
MLPZETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B20.94%

BOTTOM ETF PERFORMERS

NUGTDirexion Daily Gold Miners Index Bull 3x Shares-40.84%
JNUGDirexion Daily Junior Gold Miners Index Bull 3X Shares-39.38%
CWEBDirexion Daily CSI China Internet Index Bull 2X Shares-32.83%
GDXXProShares Ultra Gold Miners-27.31%
SHNYDirexion Daily Silver Miners Index Bull 2X Shares-26.50%

top creations

UVXYProShares Ultra VIX Short-Term Futures ETF401.46
NUGTDirexion Daily Gold Miners Index Bull 3x Shares231.52
UGAZVelocityShares 3X Long Natural Gas ETN187.58
SSOProShares Ultra S&P 500182.85
LABUDirexion Daily S&P Biotech Bull 3X Shares72.97

top redemptions

TQQQProShares UltraPro QQQ-172.50
SPXLDirexion Daily S&P 500 Bull 3x Shares-161.98
FASDirexion Daily Financial Bull 3x Shares-132.65
UDOWProShares UltraPro Dow30-129.39
UPROProShares UltraPro S&P500-113.37

AUM WINNERS

MLPQETRACS 2xMonthly Leveraged Alerian MLP Infrastructure Index ETN Series B53.55%
EUFLDirexion Daily MSCI European Financials Bull 2X Shares53.51%
RXLProShares Ultra Health Care51.40%
PFFAVirtus InfraCap U.S. Preferred Stock ETF50.28%
FNGUBMO REX MicroSectors FANG+ Index 3X Leveraged ETN45.36%

AUM LOSERS

LTLProShares Ultra Telecommunications-64.62%
CWEBDirexion Daily CSI China Internet Index Bull 2X Shares-43.99%
GDXXProShares Ultra Gold Miners-31.89%
SHNYDirexion Daily Silver Miners Index Bull 2X Shares-29.52%
UGAZVelocityShares 3X Long Natural Gas ETN-29.08%

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