Leveraged ETFs: How to Maximize Short Term Returns

Leveraged ETFs: The What

There’s always more to know when it comes to investing. Leveraged ETFs are a relatively new financial tool that, while somewhat complex and high risk, can be extremely advantageous if used correctly.

A leveraged ETF is a fund that is designed to track a specific index while simultaneously multiplying its returns. Using a combination of derivatives and debt, leveraged ETFs attempt to maintain a constant multiplier, most commonly 2x or 3x the returns of the underlying index.

Investors most commonly use leveraged ETFs when there is an all but certain change in market conditions. Because they are a high risk and high cost investment vehicle, they are mostly used over short term spans with high certainty.

Leveraged ETFs exist for the entire investment spectrum, from 2x Bull S&P 500 ETFs to 3x Bear Natural Gas funds. Through these funds, one can speculate on bonds, commodities, currencies, real estate, stocks, and more. Today, I’ll highlight some funds to watch in each major category of leveraged ETFs.

I’ve broken the following ETFs into categories according to which type of assets they leverage. Each group contains notable funds that stand out in Total Assets, Year to Date return, or Average Volume. Click on the ticker symbol to trade on Wall Street Survivor, and click on the full name of each fund to see more data.

Most Active Leveraged Equity ETFs

DescriptionTickerAssetLeverageBull/Bear
Direxion Daily Junior Gold Miners Index Bull 3x SharesJNUGEquity – Financial3xBullish
Direxion Daily Gold Miners Bull 3X SharesNUGTEquity – Financial3xBullish
ProShares UltraPro QQQTQQQEquity – Financial3xBullish
Direxion Daily Brazil Bull 3X SharesBRZUEquity – Financial3xBullish
ProShares UltraPro S&P 500UPROEquity – Financial3xBullish

 

DescriptionTickerAssetLeverageBull/Bear
ProShares UltraPro Short QQQSQQQEquity – Financial3xBearish
Direxion Daily Small Cap Bear 3X SharesTZAEquity – Financial3xBearish
Direxion Daily S&P Oil & Gas Exploration & Production Bear 3x SharesDRIPEquity – Financial3xBearish
ProShares UltraPro Short S&P 500SPXUEquity – Financial3xBearish
ProShares UltraPro Short Dow30SDOWEquity – Financial3xBearish

 

DUST: Yahoo FInance

DUST: Yahoo Finance

Most Active Leveraged Commodity ETFs

DescriptionTickerAssetLeverageBull/Bear
VelocityShares 3x Long CrudeETNUWTICommodity – Oil3xBullish
VelocityShares 3x Long Silver ETNUSLVCommodity – Silver3xBullish
VelocityShares 3x Long Crude Oil ETNUWTCommodity – Oil3xBullish
VelocityShares 3x Long Natural GasUGAZCommodity – Natural Gas3xBullish
VelocityShares 3x Long GoldETNUGLDCommodity – Gold3xBullish
DescriptionTickerAssetLeverageBull/Bear
VelocityShares 3x Inverse Crude Oil ETNDWTCommodity – Oil3xBearish
VelocityShares 3x Inverse Natural GasDGAZCommodity – Natural Gas3xBearish
VelocityShares 3x Inverse Crude ETNDWTICommodity – Oil3xBearish
ProShares UltraPro 3x Short Crude Oil ETFOILDCommodity – Oil3xBearish
VelocityShares 3x Inverse Silver ETNDSLVCommodity – Silver3xBearish
DSLV: Yahoo Finance

DSLV: Yahoo Finance

Leveraged Bond ETFs

DescriptionTickerAssetLeverageBull/Bear
Direxion Daily 20-Year Treasury Bull 3XTMFBond3xBullish
DB 3x Japanese Govt Bond Futures ETNJGBTBond3xBullish
DB 3x Italian Treasury Bond Futures ETNITLTBond3xBullish
DescriptionTickerAssetLeverageBull/Bear
Direxion Daily 20-Year Treasury Bear 3XTMVBond3xBearish
UltraPro Short 20+ Year TreasuryTTTBond3xBearish
DB 3x Short 25+ Year Treasury Bond ETNSBNDBond3xBearish
TTT: Yahoo Finance

TTT: Yahoo Finance

The above ETFs are by far the most common classes of leveraged funds. So check them out and figure out how each one could help you maximize your portfolio profits! If you’re interested in more unique funds, here are a few more to cut your teeth on!

Leveraged Currency ETFs

  1. EUOProShares UltraShort Euro: Highest Total Assets ($170,540,000)
  2. DAUDVelocityShares Daily 4x Long USD vs AUD ETN: Highest YTD Return (24.59%)
  3. YCSProShares UltraShort Yen: Second highest in Avg. Volume and Total Assets

Leveraged Real Estate ETFs

  1. MORLETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN: Highest Total Assets ($481,000,000)
  2. UREProShares Ultra Real Estate: Highest YTD Return (3.23%)
  3. DRNDirexion Daily Real Estate Bull 3x Shares: Second in Avg. Volume and YTD Return
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