Your Guide to 3x Leveraged ETFs
Investment Options for Your Portfolio
While leveraged exchange-traded funds (ETFs) can be seen as controversial investments, they also may come with high returns. These 3x leveraged ETFs allow you to earn up to 3x the regular return. However, they also allow you to lose up to 3x the regular loss. Take the time to understand leveraged ETFs, especially if you're a beginner, because they may not be a good fit for your trading strategy.
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. This means that a 3x leveraged ETF could give an investor up to 300% higher returns—or 300% lower returns.
It's also important to know that the return is expected on the daily return, not the annual return. Thus, it may not be wise to think of 3x leveraged ETFs as long-term investments.
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 200% higher returns (or losses). In the long run, leveraged ETFs are not meant for every investor's portfolio, so consider all of your options before investing your money.
List of 3x Leveraged ETFs
There are several 3x leveraged ETFs for investors to consider 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 (go up) when the underlying index that it tracks loses money (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
Fidelity. "Leveraged ETFs." Accessed April 8, 2020.
Direxion. "Change in Investment Objectives and Strategies of Ten Daily Leveraged and Daily Inverse Leveraged Funds." Accessed April 8, 2020.
Direxion. "Direxion Closing Eight Funds Due to Limited Interest Since Launch." Accessed April 8, 2020.
Investor.gov. "SEC-FINRA Investor Alert on Leveraged and Inverse ETFs." Accessed April 8, 2020.