10 Most Heavily Traded Leveraged ETFs YTD

Leveraged ETFs have gained immense popularity in recent months owing to the high levels of volatility in the stock markets. These products try to magnify the returns of the underlying index with the leverage factor of 2x or 3x on a daily basis by employing various investment strategies such as swaps, futures contracts and other derivative instruments (read: Understanding Leveraged ETFs).

Due to their compounding effect, investors can enjoy higher returns in a very short period of time provided the trend remains a friend. However, these funds run the risk of huge losses compared to traditional funds in fluctuating or seesawing markets. Further, their performances could vary significantly from the actual performance of their underlying index over a longer period when compared to a shorter period (such as, weeks or months).

Despite this drawback, investors jumped into these products for quick turns. We have highlighted 10 leveraged ETFs that have seen massive trading so far this year.
Most of these ETFs have delivered negative returns from a year-to-date look, yet have been investors’ darlings with abnormal returns piled up in a shorter period or when the trend favored a specific corner of the world.

ProShares Ultra VIX Short-Term Futures ETF (UVXY)

Leveraged Factor: 2x
Benchmark Index: S&P 500 VIX Short-Term Futures Index
YTD Volume: 91.4 billion

This product provides two times (2x) exposure to the daily performance of the S&P 500 VIX Short-Term Futures Index, which reflects implied volatility of the S&P 500 Index at various points along the volatility forward curve. It offers a daily rolling long position in the first and second months VIX futures contracts. The ETF has amassed about $438.4 million in its asset base while charges 95 bps in fees per year from investors. It is the most heavily traded ETF so far this year, exchanging a total of 91.4 billion shares. The fund has lost 48.7% on a year-to-date timeframe (read: Leveraged Volatility ETFs Gain Over 100% from Global Rout).

Direxion Daily Small Cap Bull & Bear 3x Shares (TNA)

Leveraged Factor: 3x
Benchmark Index: Russell 2000 Index
YTD Volume: 80.8 billion

This product provides triple leveraged play to the small cap Russell 2000 Index, charging 95 bps in fees and expenses. It has been able to manage $875.4 million in its asset base with year-to-date trading volume of 80.8 billion shares. TNA is down 14% so far this year.

ProShares Ultra S&P500 ETF (SSO)

Leveraged Factor: 2x
Benchmark Index: S&P 500 Index
YTD Volume: 65.3 billion

This is the most popular and liquid ETF in the leveraged space with AUM of $1.7 billion. The fund seeks to deliver twice the return of the S&P 500 Index, charging investors 0.89% in expense ratio. It has seen solid trading volumes of more than 65 billion so far this year and is down 8.3% (read: 10-Minute Guide to 10 Most Popular Leveraged ETFs).
 
Daily Gold Miners Bull 3x shares (NUGT)

Leveraged Factor: 3x
Benchmark Index: NYSE Arca GoldMiners Index
YTD Volume: 35.7 billion

This product seeks to deliver thrice the daily performance of the NYSE Arca Gold Miners Index, which consists of firms that operate globally in both developed and emerging markets, and are involved primarily in the exploration and production of gold. It is rich in AUM of $561 million and has seen solid trading of 35.7 billion shares so far in the year. Expense ratio comes in at 0.95%. The fund has delivered negative returns of 73.7% year to date (read: Gold Mining ETFs Benefit Most from Fed Minutes).

ProShares UltraPro S&P500 ETF (UPRO)

Leveraged Factor: 3x
Benchmark Index: S&P 500 Index
YTD Volume: 35.5 billion

This product also tracks the S&P 500 index, but offers thrice the returns of the daily performance with a bit higher expense ratio (by 6 bps) than that of SSO. It has AUM of $872.2 million and year-to-date trading volume of 35.5 billion. UPRO is down over 14.5% so far this year.

ProShares Ultra Bloomberg Crude Oil ETF (UCO)

Leveraged Factor: 2x
Benchmark Index: Bloomberg WTI Crude Oil Subindex
YTD Volume: 34.9 billion

This fund provides a leveraged play in the crude oil segment of the commodities market. It seeks to deliver twice the return of the daily performance of the Bloomberg WTI Crude Oil Subindex, which consists of futures contracts on crude oil. It has $856.2 million in AUM and has traded in a solid volume of around 34.9 billion shares so far this year. Expense ratio comes in at 0.95%. The ETF is down 53.5% in the year-to-date timeframe (read: Relief for Leveraged Oil ETFs).  

VelocityShares 3x Long Crude Oil ETN (UWTI)

Leveraged Factor: 3x
Benchmark Index: S&P GSCI Crude Oil Index Excess Return
YTD Volume: 30.3 billion

This is another popular leveraged fund targeting the energy segment of the commodity market through WTI crude oil futures contracts. It seeks to deliver thrice the returns of the S&P GSCI Crude Oil Index Excess Return and has amassed $930.1 million in its asset base. Though the fund charges a higher fee of 1.35% per year, its total trading volume is incredible, having exchanged over 30 billion shares so far this year. UWTI is down about 75.7% in the same time frame.

ProShares Ultra QQQ (QLD)

Leveraged Factor: 2x
Benchmark Index: NASDAQ-100 Index
YTD Volume: 29.9 billion

Investors have embraced this product to make huge profits from the soaring NASDAQ-100 Index for a very short period. The product has exchanged 29.9 billion shares in hand this year. It offers twice the return of the daily performance of the index, charging 0.95% in annual fees. The fund has AUM of $918.4 billion and has added 1.3% in the year-to-date timeframe.

Direxion Daily Financial Bull 3x Shares (FAS)

Leveraged Factor: 3x
Benchmark Index: Russell 1000 Financial Services Index
YTD Volume: 23.4 billion

This ETF seeks to make large profits from the bullish trend in the financial sector. It provides three times exposure to the performance of the Russell 1000 Financial Services Index. The fund has amassed nearly $1.1 billion in its asset base and is among the top 10 actively traded ETF of 2015 with total volume of 23.4 billion shares. It charges 95 bps in annual fees and has shed about 15.8% in the year-to-date timeframe (see: all Leveraged Equity ETFs here).

Direxion Daily Energy Bull & 3x Shares (ERX)

Leveraged Factor: 3x
Benchmark Index: Russell 1000 Financial Services Index
YTD Volume: 23.4 billion

ERX makes for an excellent pick for investors seeking to make large profits from the energy space in a short span. The fund creates a triple leveraged long position in the S&P Energy Select Sector Index while charging 95 bps in fees a year. It has $421 million in its asset base and has a solid total trading volume of 23.4 billion shares this year. The ETF has lost over 50% year to date.

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PRO-ULT VIX STF (UVXY): ETF Research Reports
 
DIRX-SC BULL 3X (TNA): ETF Research Reports
 
PRO-ULTR S&P500 (SSO): ETF Research Reports
 
DIR-D GM BL 3X (NUGT): ETF Research Reports
 
PRO-ULT S&P500 (UPRO): ETF Research Reports
 
PRO-ULT BB CRUD (UCO): ETF Research Reports
 
VEL-3X LNG CRD (UWTI): ETF Research Reports
 
PRO-ULTR QQQ (QLD): ETF Research Reports
 
DIR-FIN BULL 3X (FAS): ETF Research Reports
 
DIR-EGY BULL 3X (ERX): ETF Research Reports
 
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