• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Optimized Portfolio

Investing and Personal Finance

  • Beginners Start Here
  • Investing 101
    • Beginners Start Here – 10 Steps To Start Building Wealth
    • What Is the Stock Market? How It Works & How to Invest in It
    • How To Invest in an Index Fund – The Best Index Funds
    • Portfolio Asset Allocation by Age
    • How To Invest Your Emergency Fund
    • Portfolio Diversification – How To Diversify Your Portfolio
    • Dollar Cost Averaging vs. Lump Sum Investing (DCA vs. LSI)
    • How To Invest Your HSA (Health Savings Account)
    • Factor Investing and Factor ETFs – The Ultimate Guide
    • more…
  • Lazy Portfolios
    • All Weather Portfolio
    • Bogleheads 3 Fund Portfolio
    • HEDGEFUNDIE’s Excellent Adventure
    • Warren Buffett Portfolio
    • Golden Butterfly Portfolio
    • Paul Merriman Ultimate Buy and Hold Portfolio
    • Ben Felix Model Portfolio
    • Permanent Portfolio
    • David Swensen Portfolio
    • 60/40 Portfolio
    • more…
  • Funds
    • VOO vs. VTI – Vanguard S&P 500 or Total Stock Market ETF?
    • The 7 Best International ETFs
    • The 8 Best Small Cap ETFs (4 From Vanguard)
    • The 5 Best REIT ETFs
    • The 5 Best EV ETFs – Electric Vehicles ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • The 5 Best Tech ETFs
    • The 7 Best Small Cap Value ETFs
    • The 6 Best ETFs for Taxable Accounts
    • The 5 Best Emerging Markets ETFs (1 From Vanguard) for 2023
    • more…
  • Leverage
    • What Is a Leveraged ETF and How Do They Work?
    • How To Beat the Market Using Leverage and Index Investing
    • The 9 Best Leveraged ETFs
    • Hedgefundie’s Excellent Adventure
    • Leveraged All Weather Portfolio
    • Leveraged Permanent Portfolio
    • Leveraged Golden Butterfly Portfolio
    • NTSX – Review and Summary
    • TQQQ – Is It A Good Investment?
    • PSLDX – A Review
    • SWAN – A Review
    • RPAR Risk Parity ETF Review
    • more…
  • Dividends
    • The Best M1 Finance Dividend Pie
    • The 11 Best Dividend ETFs
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • 8 Reasons Why I’m Not a Dividend Income Investor
    • QYLD – A Harsh Review
    • more…
  • Broker Reviews
    • The 5 Best Stock Brokers
    • The 4 Best Investing Apps
    • M1 Finance Review
    • Brokers with the Lowest Margin Rates
    • M1 Finance vs. Fidelity
    • M1 Finance vs. Vanguard
    • Webull vs. Robinhood
    • Stash vs. Robinhood
    • M1 Borrow Review (How M1’s Margin Loan Works)
    • more…
  • Retirement
    • The 10 Best ETFs for Retirement Portfolios in 2023
    • The 4% Rule for Retirement Withdrawal Rate – A Revisitation
    • Sequence of Return Risk in Retirement Explained
    • Traditional IRA Explained
    • Roth IRA Explained
    • 401k vs. Roth IRA
    • Roth IRA vs. Traditional IRA
    • Backdoor Roth IRA Explained
    • more…

The 9 Best Leveraged ETFs To Enhance Portfolio Exposure (2023)

Last Updated: March 22, 2022 20 Comments – 4 min. read

Leveraged ETFs allow investors to enhance asset exposure without taking on a margin loan. Below we’ll review the 9 best leveraged ETFs for 2023.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality, ad-free content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I get if you decide to purchase through my links. Read more here.

In a hurry? Here’s the list:

  1. TQQQ – ProShares UltraPro QQQ
  2. QLD – ProShares Ultra QQQ
  3. TECL – Direxion Daily Technology Bull 3X Shares
  4. SSO – ProShares Ultra S&P 500
  5. UPRO – ProShares UltraPro S&P 500
  6. SPXU – ProShares UltraPro Short S&P 500
  7. TNA – Direxion Daily Small Cap Bull 3X Shares
  8. TMF – Direxion Daily 20-Year Treasury Bull 3X
  9. UST – ProShares Ultra 7-10 Year Treasury

Contents

  • Introduction – Why Leveraged ETFs?
  • The 9 Best Leveraged ETFs
    • TQQQ – ProShares UltraPro QQQ
    • QLD – ProShares Ultra QQQ
    • TECL – Direxion Daily Technology Bull 3X Shares
    • SSO – ProShares Ultra S&P 500
    • UPRO – ProShares UltraPro S&P 500
    • SPXU – ProShares UltraPro Short S&P 500
    • TNA – Direxion Daily Small Cap Bull 3X Shares
    • TMF – Direxion Daily 20-Year Treasury Bull 3X
    • UST – ProShares Ultra 7-10 Year Treasury
  • Where to Buy These Leveraged ETFs

Introduction – Why Leveraged ETFs?

If you’ve landed here, you likely already know what leveraged ETFs are and how they work. Leveraged ETFs allow you to enhance investment exposure without taking on margin, and at degrees greater than what margin would allow.

Leveraged ETFs usually come in either 2x or 3x, providing 200% or 300% exposure to the daily returns of the underlying index, resetting daily. There are also inverse leveraged ETFs (-2x and -3x), allowing bears to bet on downward movement. Because of their complex nature involving swaps, debt, and daily rebalancing, leveraged ETFs are likely only appropriate for experienced investors with a high risk tolerance.

Liquidity is an important factor when choosing leveraged ETFs, as low-volume leveraged ETFs are often at risk of closure, and most investors don’t hold them long-term; they are more popular among day traders. That said, I’ve explained before why I don’t think leveraged ETFs are unsuitable for holding long-term, despite the fearmongering perpetuated in the financial blogosphere. With proper use, employing leverage can potentially enhance returns drastically (maybe even enough to beat the market), albeit obviously with a much higher risk profile, as leverage also magnifies losses. This enhanced exposure comes at a cost; leveraged ETFs usually carry high fees.

Be sure to read up on the dangers and details of using leverage before blindly buying in. Again, leveraged ETFs are better suited for experienced investors.

Below are some of the best leveraged ETFs.

The 9 Best Leveraged ETFs

Below is a list of the 9 best leveraged ETFs to increase the risk/return profile in your portfolio.

TQQQ – ProShares UltraPro QQQ

The ProShares UltraPro QQQ ETF (TQQQ) is the most popular leveraged ETF, with over $8 billion in assets under management. The fund seeks to deliver 300% of the daily returns of the underlying NASDAQ-100 index, composed mostly of tech and communications stocks. This ETF has an expense ratio of 0.95%.

I wrote specifically about a TQQQ strategy here.

QLD – ProShares Ultra QQQ

Those seeking 2x the NASDAQ-100 instead of 3x may want to use the ProShares Ultra QQQ ETF (QLD), seeking to provide 200% returns of the underlying index before fees. This ETF has over $3 billion in assets and an expense ratio of 0.95%.

TECL – Direxion Daily Technology Bull 3X Shares

Traders looking for a pure tech play may enjoy the Direxion Daily Technology Bull 3X Shares ETF (TECL), which seeks to provide 300% of the daily returns, before fees, of the Technology Select Sector Index. The fund has over $1 billion in assets and expense ratio of 1.08%.

SSO – ProShares Ultra S&P 500

Longer-term investors will likely want a broader, more diversified index to apply leverage to. The ProShares Ultra S&P 500 ETF (SSO) seeks to deliver 2x the returns of the famous S&P 500 index. The fund has nearly $3 billion in assets and an expense ratio of 0.90%.

UPRO – ProShares UltraPro S&P 500

Those preferring to leverage 3x the S&P 500 can use the ProShares UltraPro S&P 500 ETF (UPRO). This ETF is a major component of both the Hedgefundie portfolio and my leveraged All Weather Portfolio. The fund has roughly $1.5 billion in assets and an expense ratio of 0.92%.

SPXU – ProShares UltraPro Short S&P 500

Think the market will tank soon? The ProShares UltraPro Short S&P 500 ETF (SPXU) is a triple leveraged ETF offering 3x daily short exposure to the S&P 500 Index and carries an expense ratio of 0.91%.

TNA – Direxion Daily Small Cap Bull 3X Shares

Prefer to apply leverage to small-caps? The Direxion Daily Small Cap Bull 3X Shares ETF (TNA) provides 3x daily exposure to the Russell 2000 Index, an index comprised of 2,000 small-cap stocks. The fund has an expense ratio of 1.14%.

TMF – Direxion Daily 20-Year Treasury Bull 3X

Bonds are an important part of a diversified portfolio, especially in the context of leveraged exposure, to provide protection against black swan events. The Direxion Daily 20-Year Treasury Bull 3X ETF (TMF) seeks to provide 300% exposure to NYSE 20 Year Plus Treasury Bond Index, an index of long-term treasury bonds. TMF is another important component of the Hedgefundie portfolio, essentially to provide stock crash insurance when held alongside UPRO. The fund has an expense ratio of 1.05%.

UST – ProShares Ultra 7-10 Year Treasury

Those looking to use leverage with a lower leverage ratio and a shorter bond duration can use the ProShares Ultra 7-10 Year Treasury ETF (UST), providing 2x bull exposure to intermediate treasury bonds via the Barclays Capital U.S. 7-10 Year Treasury Index. This ETF has an expense ratio of 0.95%.

Where to Buy These Leveraged ETFs

All these leveraged ETFs should be available at any major broker. My choice is M1 Finance for U.S. investors. M1 is a great choice of broker to use leveraged ETFs because they feature dynamic rebalancing of new deposits, and one-click manual rebalancing. The broker also has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, and a sleek, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.

Canadians can find the above ETFs on Questrade or Interactive Brokers. Investors outside North America can use eToro or possibly Interactive Brokers.


Disclosures:  I am long UPRO and TMF.

Interested in more Lazy Portfolios? See the full list here.

Disclaimer:  While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.

m1 finance get started

Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com.

77 percent of millenials report their finances are a source of anxiety

Related Posts

  • The 5 Best Mid Cap ETFs (3 From Vanguard) for 2023
  • The 5 Best Healthcare ETFs for 2023
  • Paul Merriman 4 Fund Portfolio Review & M1 Finance ETF Pie (2023)
  • 3 Hedge Fund ETFs To Invest Like a Hedge Fund in 2023
  • Bob Clyatt Sandwich Portfolio Review and ETF’s for M1 Finance

About John Williamson

Analytical and entrepreneurial-minded data nerd, usability enthusiast, Boglehead, and Oxford comma advocate. I lead the Paid Search marketing efforts at Gild Group. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit.

Reader Interactions

Comments

  1. Jon says

    December 15, 2022 at 9:46 pm

    What risk does TMF have of going to 0 or closing? Thanks!

    Reply
  2. Pankaj Goel says

    June 15, 2022 at 8:03 pm

    How’s this for 1.5x leverage? 1/2 SPY (or VOO) and 1/2 SSO?
    Rebalance quarterly.

    Thanks.

    Reply
    • Jon says

      December 15, 2022 at 9:44 pm

      Might as well go with NTSX at that point.

      Reply
  3. Ree says

    January 6, 2022 at 6:24 am

    For Leveraged ETFs is a one off bulk purchase to hold for a year better than a regular monthly investment for 1 year?

    Reply
    • John Williamson says

      January 6, 2022 at 10:18 am

      Depends on your risk tolerance.

      Reply
  4. Frederico Muzzi says

    September 29, 2021 at 7:42 am

    Hello John, thanks again for the content!
    I really looking into build a small position with leverage ETFs. But What are your comments about the disclaimers on the ETFs pages which says “is not a buy-and-hold ETF, it’s a short-term tactical instrument”.

    Regards

    Fred

    Reply
    • John Williamson says

      September 29, 2021 at 7:33 pm

      Leverage can be dangerous, especially in the form of leveraged ETFs. Make sure you understand how they work and their dangers before blindly buying in. Fund houses are required to put those warnings because they can go to zero.

      Reply
      • Frederico says

        September 30, 2021 at 7:53 am

        Sure! That what I thought. Huge potential downside. And there is also a little asymmetry on the downside as well, right? But beside it, there is not an operational long term risk (I mean by the vehicle rather than the assets) , correct?

        Thanks

        Reply
        • John Williamson says

          September 30, 2021 at 11:38 pm

          Not sure what you’re asking. But yes there’s counterparty risk. LETFs close all the time. An improperly hedged LETF strategy – or even a diversified one – can also get close to zero.

          Reply
  5. Jack says

    August 14, 2021 at 11:02 pm

    Are there any leveraged inflation linked bond etfs?

    Thanks

    Reply
    • John Williamson says

      August 15, 2021 at 12:16 am

      Unfortunately not. Best bet is long-term TIPS via LTPZ from PIMCO.

      Reply
  6. Tom says

    July 9, 2021 at 9:19 pm

    Exactly what I was looking for thanks! How about, TNA vs URTY? URTY cheaper and slightly higher over the last year.

    Reply
    • John Williamson says

      July 12, 2021 at 8:30 am

      I might take TNA for the liquidity, but I don’t really like leveraging small caps anyway.

      Reply
      • Aakash says

        December 30, 2021 at 7:57 am

        Can you provide more information on why you don’t like leveraging small caps?

        Thanks!

        Reply
        • John Williamson says

          December 30, 2021 at 1:54 pm

          Volatility decay hurts a lot more.

          Reply
          • Aakash says

            January 3, 2022 at 5:11 pm

            Good to know, thanks!

          • Cazzzzm says

            February 9, 2022 at 9:18 pm

            John, can you talk more about how to measure volatility decay? Can I get an idea of how much volatility decay is exhibited by a leveraged etf by simply comparing the long term return vs. it’s stated goal? For example: TNA is supposed to track 3x the returns of the Russell 2000. Over the past 5 years the Russell 2000 has risen 50% and TNA has risen only 18%. Is it primarily volatility decay eating TNA’s returns?

          • John Williamson says

            February 10, 2022 at 12:17 am

            Yes. If your portfolio drops by 10%, you now require an 11% gain to get back to even; that’s volatility decay. So all else equal, the more volatile the underlying index is, the more it will suffer from volatility decay. Looking at the prospectuses of these funds and doing some Googling should yield some math and charts that will illustrate it further. No, simply comparing returns doesn’t let us derive a measure of volatility decay, but as you’ve seen, you can look at UPRO vs. its underlying and TNA vs. its underlying, for example, and see that the latter suffers more from decay.

  7. Boone Barrow says

    April 3, 2021 at 3:05 pm

    I don’t know if you’ve heard of Frank Vasquez and his new podcast at riskparityradio.com

    you two have a similar way of thinking and teaching the risk parity style of portfolio construction.

    I’d be interested to hear your take on his Ultimate Risk Parity Portfolio.

    Reply
    • John Williamson says

      April 3, 2021 at 3:13 pm

      I haven’t. Thanks for the suggestion, Boone. I’ll check it out.

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Sign up to receive email updates when a new post is published.

Don't worry, I hate spam too. No ads.

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Most Popular

Ray Dalio All Weather Portfolio Review, ETFs, & Leverage (2023)

HEDGEFUNDIE’s Excellent Adventure (UPRO/TMF) – A Summary

Golden Butterfly Portfolio Review and M1 Finance ETF Pie

David Swensen Portfolio (Yale Model) Review and ETFs To Use

Harry Browne Permanent Portfolio Review, ETFs, & Leverage (2023)

Corporate Bonds vs. Government Bonds (Treasuries) – The Showdown

VIG vs. VYM – Vanguard’s 2 Popular Dividend ETFs (Review)

Warren Buffett ETF Portfolio (90/10) Review and ETFs (2023)

The 60/40 Portfolio Review and ETF Pie for M1 Finance

Bogleheads 3 Fund Portfolio Review and Vanguard ETFs (2023)

m1 sidebar

visor sidebar

Paul Merriman Ultimate Buy and Hold Portfolio Review, M1 Pie (2023)

Lowest Margin Rates Brokers (2023 Comparison)

M1 Finance vs. Vanguard Brokerage Comparison [2023 Review]

M1 Finance vs. Fidelity Brokerage Comparison [2023 Review]

The Best M1 Finance Dividend Pie for FIRE & Income Investors

Portfolio Asset Allocation by Age – Beginners To Retirees

The 5 Best Stock Brokers Online for Investing (2023 Review)

The 4 Best Investing Apps for Beginners (2023 Review)

The 7 Best Small Cap ETFs (3 From Vanguard) for 2023

The 6 Best REIT ETFs To Invest in Real Estate for 2023

The 6 Best Tech ETFs To Buy Tech Stocks in 2023

9 Best Clean Energy ETFs To Go Green in Your Portfolio (2023)

The 13 Best Small Cap Value ETFs (3 From Vanguard) for 2023

Why, How, & Where To Invest Your Emergency Fund To Beat Inflation

VOO vs. VTI – Vanguard’s S&P 500 and Total Stock Market ETFs

9 Best International ETFs To Buy (6 From Vanguard) in 2023

Ben Felix Model Portfolio (Rational Reminder, PWL) ETFs & Review

Factor Investing and Factor ETFs – The Ultimate Guide

Gone Fishin’ Portfolio Review (Alexander Green) & ETFs (2023)

TQQQ – Is It A Good Investment for a Long Term Hold Strategy?

Recent Posts

Roth IRA vs. Traditional IRA – Which Is Better for You? (2023)

VXUS vs. IXUS – Vanguard or iShares International ETF?

Tail Risk – What It Is and How To Hedge Against It

I Bonds Explained (US Savings Bonds) – Ultimate Guide (2023)

JEPI ETF Review – JPMorgan Equity Premium Income ETF

Sharpe Ratio vs. Sortino vs. Calmar – Risk Adjusted Return

Investing Risk Explained (My Take on Portfolio Risk & Volatility)

HNDL ETF Review – Is HNDL a Good Investment? (7HANDL™ ETF)

NUSI ETF Review – Is NUSI a Good Investment?

3 Best SPAC ETFs To Invest in SPACs in 2023 – But Should You?

VOO vs. VOOV vs. VOOG – Vanguard S&P 500, Value, or Growth?

VXUS vs. VEU – Which Vanguard Total International ETF?

VT vs. VTI – Global Stock Market vs. Total U.S. Stock Market

RPAR Risk Parity ETF Review – An All Weather Portfolio ETF?

PSLDX – A Review of the PIMCO StocksPLUS® Long Duration Fund

View All...

Footer

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Amazon Affiliate Disclosure

OptimizedPortfolio.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Email Newsletter

Sign up to receive email updates when a new post is published.

Don't worry, I hate spam too. No ads.

About - My Toolbox - Privacy - Terms - Contact


Copyright © 2023 OptimizedPortfolio.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Ok, Got ItReject Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT