Best Bull Leveraged ETFs 2x/3x For Trading in 2022

Leveraged/Long/Bull ETFs Enable You To Increase Your Profit In Bull Market. We List the Best Leveraged ETFs by Assets, Liquidity & Expense Ratio

What Are Leveraged ETFs?

Leveraged or Bull ETFs are exchange-traded funds that enable you to bet on the upwards direction of a market, sector, or index. Leveraged ETFs enable you to magnify your profits or losses using leverage without the complexity of Options contracts.

Leveraged ETFs usually have built-in leverage of 2x or 3x leverage.  If you buy a 3x Leveraged ETF on any market day, and the index moves up 2%, you can expect a 6% profit. Conversely, if the market moved down 2% on that day, the 3x leveraged ETF would ensure you incur a loss of 6%.

The Best Leveraged ETFs by Assets, Expenses & Volume
The Best Leveraged ETFs by Assets, Expenses & Volume

The Best Leveraged Bull ETFs

While there is no single “Best Leveraged ETF,” good Bull ETFs all share the following traits. Firstly, they should have significant assets under management; secondly, they should have large enough trading volume to ensure liquidity; and lastly, they should have low management fees.

This is why our list of the best Leveraged ETFs includes the 10-day average trading volumes, the net assets under management, and the expense ratio.

How to Trade Leveraged ETFs?

1. Understand Leveraged ETF Decay

All Leveraged ETFs have warnings that they should only be traded on a daily basis. Of course, you can hold them for longer than one day, but you will see mismatches in the return of the short ETF vs. the actual index over time. This is known as leveraged ETF decay.

Leveraged ETFs Do Not Match the Index Performance Because:

  1. The underlying contracts supporting the leveraged ETFs need to be rebalanced at the end of the trading day; this causes slippage.
  2. The effect of the volatility of an index will affect compounding, which affects the inverse ETF. For more information, see this Leveraged ETF FAQ.

2. Leveraged ETFs Should Have Good Liquidity & Volume

It is important that if you purchase a Leveraged/Bull ETF that you can actually sell it when you want to, for a price that is close to your target price. There are 124 Leveraged ETFs on the US exchanges, and the average 10-day trading volume is 1 million shares per day. You will want to choose ETFs that average at least 500,000 traded per day.

3. Choose ETFs With Higher Assets Under Management

The median amount of Net Assets under management for leveraged and inverse ETFs is $50 million. It is wise to only utilize ETFs with more than $100 million in assets managed; this helps with liquidity and the fund’s stability.

4. ETFs Should Have Low Expenses

Any Inverse or Leveraged ETF you choose to trade should have lower expense ratios. Of the 244 ETFs in this study, the average expense ratio is 0.96%, but the range of expenses spanned from 1.65% to 0.3%. The largest most liquid funds have an expense ratio between 0.95% and 1.08%, which is acceptable.

5. Use a Commission Free Broker to Minimize Costs

When purchasing ETFs, you should select a broker that enables you to buy and sell ETFs with $0 zero commissions. Firstrade has over 2,200 commission-free ETFs, the largest in the industry. Read the Firstrade Review or visit Firstrade.

Leveraged S&P 500 ETFs

Company Ticker Expense Ratio Leverage
ProShares Ultra S&P500 SSO 0.91% 2x
ProShares UltraPro S&P500 UPRO 0.93% 3x
Direxion Daily S&P500 Bull 3X Shares SPXL 1.01% 3x
Direxion Daily S&P Biotech Bull 3X Shares LABU 1.04% 3x
Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares GUSH 1.04% 2x
Direxion Daily S&P 500 High Beta Bull 3X Shares HIBL 0.98% 3x
Direxion Daily S&P 500 Bull 2X Shares SPUU 0.64% 2x
UBS ETRACS Monthly Pay 2xLeveraged S&P Dividend ETN SDYL 0.30% 2x

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Leveraged NASDAQ ETFs

Company Ticker Expense Ratio Leverage
Invesco QQQ Trust QQQ 0.20% 1x
ProShares UltraPro QQQ TQQQ 0.95% 3x
ProShares Ultra QQQ QLD 0.95% 2x
ProShares Ultra Nasdaq Biotechnology BIB 0.95% 2x

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Leveraged Dow ETFs

Company Ticker Expense Ratio Leverage
ProShares UltraPro Dow30 UDOW 0.95% 3x
ProShares Ultra Dow30 DDM 0.95% 2x
Direxion Daily Dow Jones Internet Bull 3X Shares WEBL 0.98% 3x

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Leveraged Russell Mid Cap ETFs

Company Ticker Expense Ratio Leverage
ProShares UltraPro Russell2000 URTY 0.95% 3x
ProShares Ultra Russell2000 UWM 0.95% 2x

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Leveraged Oil ETFs

Company Ticker Expense Ratio Leverage
ProShares Ultra Bloomberg Crude Oil UCO 0.95% 2x
Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares GUSH 1.04% 2x
MicroSectors U.S. Big Oil Index 3X Leveraged ETNs NRGU 0.95% 3x
ProShares Ultra Oil & Gas DIG 0.95% 2x
MicroSectors U.S. Big Oil Index 2X Leveraged ETNs NRGO 0.95% 3x

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Leveraged Gold ETFs

Company Ticker Expense Ratio Leverage
Direxion Daily Gold Miners Index Bull 2X Shares NUGT 1.17% 3X
Direxion Daily Junior Gold Miners Index Bull 2X Shares JNUG 1.12% 2X
ProShares Ultra Gold UGL 0.95% 3X
DB Gold Double Long ETN DGP 0.75% 2X

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Leveraged Emerging Markets/International ETFs

Company Ticker Expense Ratio Leverage
Direxion Daily MSCI Brazil Bull 2X Shares BRZU 1.29% 2x
Direxion Daily MSCI Emerging Markets Bull 3X Shares EDC 1.33% 3x
Direxion Daily MSCI India Bull 3x Shares INDL 1.33% 3x
Direxion Daily MSCI Real Estate Bull 3X Shares DRN 0.99% 3x
ProShares Ultra MSCI Emerging Markets EET 0.95% 2x
Direxion Daily MSCI Developed Markets Bull 3X Shares DZK 1.16% 3x
Direxion Daily MSCI Mexico Bull 3X Shares Direxion Daily MSCI Mexico Bull 3 MEXX 1.21% 3x
ProShares Ultra MSCI EAFE EFO 0.95% 2x
ProShares Ultra MSCI Brazil Capped UBR 0.95% 2x
ProShares Ultra MSCI Japan EZJ 0.95% 2x

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3X Leveraged ETFs List

Company Ticker Expense Ratio Leverage
ProShares UltraPro QQQ TQQQ 0.95% 3x
ProShares UltraPro S&P500 UPRO 0.93% 3x
Direxion Daily S&P500 Bull 3X Shares SPXL 1.01% 3x
ProShares UltraPro Dow30 UDOW 0.95% 3x
Direxion Daily S&P Biotech Bull 3X Shares LABU 1.04% 3x
ProShares UltraPro Russell2000 URTY 0.95% 3x
Direxion Daily MSCI Emerging Markets Bull 3X Shares EDC 1.33% 3x
MicroSectors U.S. Big Oil Index 3X Leveraged ETNs NRGU 0.95% 3x
Direxion Daily MSCI India Bull 3x Shares INDL 1.33% 3x
Direxion Daily MSCI Real Estate Bull 3X Shares DRN 0.99% 3x
Direxion Daily Dow Jones Internet Bull 3X Shares WEBL 0.98% 3x
Direxion Daily S&P 500 High Beta Bull 3X Shares HIBL 0.98% 3x
Direxion Daily MSCI Developed Markets Bull 3X Shares DZK 1.16% 3x
Direxion Daily MSCI Mexico Bull 3X Shares Direxion Daily MSCI Mexico Bull 3 MEXX 1.21% 3x
MicroSectors U.S. Big Oil Index 2X Leveraged ETNs NRGO 0.95% 3x

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Leveraged ETF Performance vs. The S&P 500

The long-term performance of leveraged ETFs does not match the performance of the underlying index. In this example, you can see a 1-year chart of the S&P 500 versus the ProShares Ultra 2X leveraged ETF.

Leveraged ETF Performance vs S&P 500 Index 1-Year 2020 (ProShares Ultra - Ticker SSO)
Leveraged ETF Performance vs. S&P 500 Index 1-Year (ProShares Ultra – Ticker SSO)

1 Year 2X Leveraged ETF vs. S&P 500 Performance.

  • The S&P 500 Index gained 13%
  • The ProShares Ultra 2X gained 14.8%

From October 25, 2019, to October 25, 2020, the 2X leveraged ETF made a 14.8% gain, only 1.8% more than the S&P 500, which made 13%. If you had expected to make twice the gain of the S&P 500, you would be mistaken. As mentioned before, this disparity is down to leveraged ETF decay through compounding and rebalancing.

Bear Market Leveraged ETF Performance

1 Month 2X Leveraged ETF vs. S&P 500 Performance.

  • The S&P 500 Index lost 32%
  • The ProShares Ultra 2X lost 51%

From peak to the bottom of the Corona Crash (February 20, 2020, to March 20, 2020), the 2X Long/Bull ETF made a loss of 51% versus the loss in the S&P 500 of 32%. The losses were, of course, magnified due to the 2x leverage, but as you can see, the losses were about 1.8x.

Bull Market Leveraged ETF Performance

1 Month 2X Leveraged ETF vs. S&P 500 Performance.

  • The S&P 500 Index gained 55%
  • The ProShares Ultra 2X gained 201%

From March 23, 2020, to September 2, 2020, the Covid Crash Recovery Bull market, the 2X Long/Bull ETF, made a huge gain of 201% versus the S&P 500 of 55%. The gains were magnified from the expected 2x leverage to 4x. This was due to the near-constant uptrend in the market for 5 months.

Leveraged ETF Summary

Timing is crucial when trading Leveraged ETFs. The chart above highlights the fact that in the longer term, you cannot expect the 2X or 3X leverage to hold true.  But in the short-term, leveraged ETFs are a great way to magnify your profits and diversify without having to use stock options.

6 Tips On How To Trade Leveraged ETFs

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