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 152 ETFs traded in the U.S. markets, Leveraged ETFs gather total assets under management of $37.38B. 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 $4.13B in assets. In the last trailing year, the best performing Leveraged ETF was the USOU at 187.37%. 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

WTIU UBS ETRACS - ProShares Daily 3x Long Crude ETN 14.80%
OILU ProShares UltraPro 3x Crude Oil ETF 14.72%
UWT VelocityShares 3x Long Crude Oil ETN 13.62%
USOU United States 3x Oil Fund 13.46%
TPOR Direxion Daily Transportation Bull 3x Shares 12.25%

BOTTOM ETF PERFORMERS

NUGT Direxion Daily Gold Miners Index Bull 3x Shares -35.29%
JNUG Direxion Daily Junior Gold Miners Index Bull 3X Shares -31.70%
BRZU Direxion Daily MSCI Brazil Bull 3X Shares -24.71%
GDXX ProShares Ultra Gold Miners -24.24%
CWEB Direxion Daily CSI China Internet Index Bull 2X Shares -23.33%

TOP CREATIONS

NUGT Direxion Daily Gold Miners Index Bull 3x Shares 291.04
JNUG Direxion Daily Junior Gold Miners Index Bull 3X Shares 200.57
TVIX VelocityShares Daily 2x VIX Short-Term ETN 177.56
BRZU Direxion Daily MSCI Brazil Bull 3X Shares 110.64
FNGU BMO REX MicroSectors FANG+ Index 3X Leveraged ETN 74.42

TOP REDEMPTIONS

TQQQ ProShares UltraPro QQQ -329.59
SSO ProShares Ultra S&P 500 -217.95
FAS Direxion Daily Financial Bull 3x Shares -173.58
TNA Direxion Daily Small Cap Bull 3x Shares -170.78
UGAZ VelocityShares 3X Long Natural Gas ETN -161.47

AUM WINNERS

PFFA Virtus InfraCap U.S. Preferred Stock ETF 99.58%
USOU United States 3x Oil Fund 64.23%
RETL Direxion Daily Retail Bull 3x Shares 49.98%
MRRL ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN Series B 36.65%
REML Credit Suisse X-Links Monthly Pay 2xLeveraged Mortgage REIT ETN 21.98%

AUM LOSERS

PPTB PortfolioPlus Total Bond Market ETF -90.04%
LTL ProShares Ultra Telecommunications -64.28%
FLEU Barclays ETN+ FI Enhanced Europe 50 ETN Series B -40.44%
UBT ProShares Ultra 20+ Year Treasury -39.09%
MLPZ ETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B -30.26%

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