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 162 ETFs traded in the U.S. markets, Leveraged ETFs gather total assets under management of $42.29B. The average expense ratio is 1.11%. Leveraged ETFs can be found in the following asset classes:

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

The largest Leveraged ETF is the ProShares UltraPro QQQ TQQQ with $5.13B in assets. In the last trailing year, the best performing Leveraged ETF was the SOXL at 234.28%. The most-recent ETF launched in the Leveraged space was the MicroSectors Cannabis 2x Leveraged ETN MJO in 12/10/19.

Top ETF Performers

FNGU MicroSectors FANG+ Index 3X Leveraged ETN 29.23%
JNUG Direxion Daily Junior Gold Miners Index Bull 3X Shares 24.08%
NAIL Direxion Daily Homebuilders & Supplies Bull 3X Shares 23.54%
TECL Direxion Daily Technology Bull 3X Shares 22.35%
HOML ETRACS Monthly Reset 2xLeveraged ISE Exclusively Homebuilders ETN 22.11%

Bottom ETF Performers

UGAZ VelocityShares 3X Long Natural Gas ETN -94.35%
BOIL ProShares Ultra Bloomberg Natural Gas -27.86%
GASL Direxion Daily Natural Gas Related Bull 3X Shares -27.75%
GUSH Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3X Shares -26.04%
TVIX VelocityShares Daily 2x VIX Short-Term ETN -20.17%

Top Creations

UGAZ VelocityShares 3X Long Natural Gas ETN 179.84
TECL Direxion Daily Technology Bull 3X Shares 93.99
TQQQ ProShares UltraPro QQQ 93.80
UPRO ProShares UltraPro S&P500 91.05
SSO ProShares Ultra S&P 500 72.13

Top Redemptions

BRZU Direxion Daily MSCI Brazil Bull 3X Shares -196.77
NUGT Direxion Daily Gold Miners Index Bull 3X Shares -153.70
UWT VelocityShares 3x Long Crude Oil ETN -125.89
JNUG Direxion Daily Junior Gold Miners Index Bull 3X Shares -119.62
LABU Direxion Daily S&P Biotech Bull 3X Shares -75.12

AUM Winners

CEFZ ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN Series B 529.25%
LBDC ETRACS 2xLeveraged Long Wells Fargo Business Development Company ETN Series B 166.09%
TAWK Direxion Daily Communication Services Index Bull 3X Shares 142.70%
WEBL Direxion Daily Dow Jones Internet Bull 3X Shares 67.18%
MRRL ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN Series B 52.60%

AUM Losers

YCL ProShares Ultra Yen -50.81%
WTIU UBS ETRACS - ProShares Daily 3x Long Crude ETN -44.29%
UGAZ VelocityShares 3X Long Natural Gas ETN -33.95%
UBT ProShares Ultra 20+ Year Treasury -30.13%
CEFL ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN -28.40%

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