What to Know About 3x Leveraged ETFs
Leveraged ETFs do not guarantee a higher return on their underlying index or asset, even though that is the goal. If the underlying index returns 15% in a day, the 3x leveraged ETF aims to provide returns of 45%, and vice versa—so a 15% loss in a day for the index should translate into a 45% loss for the ETF.
Other Leveraged ETFs
While we’ll look at 3x leveraged ETFs below, there are also other types of leveraged ETFs, such as 2x leveraged ETFs. These serve the same investing purpose but could offer up to two times higher returns (or two times the losses). In the long run, leveraged ETFs are not meant for every investor’s portfolio, so think over all of your options prior to investing your money.
List of 3x Leveraged ETFs
There are several 3x leveraged ETFs for investors to think about for their portfolio. Keep in mind that 3x leveraged ETFs can change their investment objective, such as dropping to a 2x leveraged ETF from a 3x leveraged ETF. They may also close and liquidate when there is an inability to attract enough investment assets. It’s also important to understand when an ETF is a leveraged ETF and when it is an inverse leveraged ETF. The latter means that the ETF will earn returns when the underlying index that it tracks goes down. Here are several 3x leveraged ETFs to consider:
CURE: Direxion Daily Healthcare Bull 3X Shares ETF DFEN: Direxion Daily Aerospace & Defense Bull 3X Shares ETF DPST: Direxion Daily Regional Banks Bull 3X Shares ETF DRN: Direxion Daily Real Estate Bull 3X Shares ETF DUSL: Direxion Daily Industrials Bull 3X Shares ETF DZK: Direxion Daily Developed Markets Bull 3X Shares ETF EDC: Direxion Daily Emerging Markets Bull 3X Shares ETF EURL: Direxion Daily FTSE Europe Bull 3x Shares ETF FAS: Direxion Daily Financial Bull 3X Shares ETF INDL: Direxion Daily MSCI India Bull 3X Shares ETF JPNL: Direxion Daily MSCI Japan Bull 3X Shares ETF KORU: Direxion Daily MSCI South Korea Bull 3X Shares ETF LABU: Direxion Daily S&P Biotech Bull and Bear 3X Shares ETF LBJ: Direxion Daily Latin America Bull 3X Shares ETF MEXX: Direxion Daily MSCI Mexico Bull 3X Shares ETF MIDU: Direxion Daily Mid Cap Bull 3X Shares ETF NAIL: Direxion Daily Homebuilders & Supplies Bull 3X Shares ETF PILL: Direxion Daily Pharmaceutical & Medical Bull 3X Shares ETF RETL: Direxion Daily Retail Bull 3X Shares ETF SOXL: Direxion Daily Semiconductor Bull and Bear 3X Shares ETF SPXL: Direxion Daily S&P 500 Bull and Bear 3X Shares ETF TECL: Direxion Daily Technology Bull and Bear 3X Shares ETF TMF: Direxion Daily 20+ Year Treasury Bull and Bear 3X Shares ETF TNA: Direxion Daily Small Cap Bull and Bear 3X Shares ETF TPOR: Direxion Daily Transportation Bull 3X Shares ETF TQQQ: ProShares UltraPro QQQ ETF TYD: Direxion Daily 7-10 Year Treasury Bull and Bear 3X Shares ETF UBOT: Direxion Robotics, Artificial Intelligence & Automation Index Bull 3X Shares ETF UDOW: ProShares UltraPro Dow30 ETF UMDD: ProShares UltraPro MidCap400 ETF UPRO: ProShares Ultra Pro S&P500 ETF URTY: ProShares UltraPro Russell2000 ETF UTSL: Direxion Daily Utilities Bull 3X Shares ETF YINN: Direxion Daily FTSE China 3X Bull and Bear 3X Shares ETF
Correction - Dec. 9, 2022: This article has been updated to correct when leverage is determined for funds that track underlying indexes.
