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

Description Ticker Asset Leverage Bull/Bear
Direxion Daily Junior Gold Miners Index Bull 3x Shares JNUG Equity – Financial 3x Bullish
Direxion Daily Gold Miners Bull 3X Shares NUGT Equity – Financial 3x Bullish
ProShares UltraPro QQQ TQQQ Equity – Financial 3x Bullish
Direxion Daily Brazil Bull 3X Shares BRZU Equity – Financial 3x Bullish
ProShares UltraPro S&P 500 UPRO Equity – Financial 3x Bullish

 

Description Ticker Asset Leverage Bull/Bear
ProShares UltraPro Short QQQ SQQQ Equity – Financial 3x Bearish
Direxion Daily Small Cap Bear 3X Shares TZA Equity – Financial 3x Bearish
Direxion Daily S&P Oil & Gas Exploration & Production Bear 3x Shares DRIP Equity – Financial 3x Bearish
ProShares UltraPro Short S&P 500 SPXU Equity – Financial 3x Bearish
ProShares UltraPro Short Dow30 SDOW Equity – Financial 3x Bearish

 

DUST: Yahoo FInance

DUST: Yahoo Finance

Most Active Leveraged Commodity ETFs

Description Ticker Asset Leverage Bull/Bear
VelocityShares 3x Long CrudeETN UWTI Commodity – Oil 3x Bullish
VelocityShares 3x Long Silver ETN USLV Commodity – Silver 3x Bullish
VelocityShares 3x Long Crude Oil ETN UWT Commodity – Oil 3x Bullish
VelocityShares 3x Long Natural Gas UGAZ Commodity – Natural Gas 3x Bullish
VelocityShares 3x Long GoldETN UGLD Commodity – Gold 3x Bullish
Description Ticker Asset Leverage Bull/Bear
VelocityShares 3x Inverse Crude Oil ETN DWT Commodity – Oil 3x Bearish
VelocityShares 3x Inverse Natural Gas DGAZ Commodity – Natural Gas 3x Bearish
VelocityShares 3x Inverse Crude ETN DWTI Commodity – Oil 3x Bearish
ProShares UltraPro 3x Short Crude Oil ETF OILD Commodity – Oil 3x Bearish
VelocityShares 3x Inverse Silver ETN DSLV Commodity – Silver 3x Bearish
DSLV: Yahoo Finance

DSLV: Yahoo Finance

Leveraged Bond ETFs

Description Ticker Asset Leverage Bull/Bear
Direxion Daily 20-Year Treasury Bull 3X TMF Bond 3x Bullish
DB 3x Japanese Govt Bond Futures ETN JGBT Bond 3x Bullish
DB 3x Italian Treasury Bond Futures ETN ITLT Bond 3x Bullish
Description Ticker Asset Leverage Bull/Bear
Direxion Daily 20-Year Treasury Bear 3X TMV Bond 3x Bearish
UltraPro Short 20+ Year Treasury TTT Bond 3x Bearish
DB 3x Short 25+ Year Treasury Bond ETN SBND Bond 3x Bearish
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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