Investor risk appetite is surging to near-record levels, with traders pouring money into speculative investment vehicles seemingly undeterred by President Donald Trump’s implemented tariffs.
Total assets under management (AUM) in all leveraged equity ETFs have rocketed by 74% since April lows, when the tariffs were announced, pushing the total past $1.6 billion, according to an analysis by The Kobeissi Letter.
Markets Have Become Increasingly ‘Febrile’
The data, sourced from Bloomberg and Macrobond, highlights a market that has become increasingly “febrile.” The influx of over $700 million into these high-risk funds since spring marks has pushed the AUM to the highest level since September 2022.
This brings the total AUM just shy of the $1.8 billion peak recorded three years ago, signaling that “risk appetite is incredibly strong.”
What Are Leveraged ETFs?
Leveraged ETFs use financial derivatives and debt to amplify the returns of an underlying index, making them popular tools for short-term speculation. The recent trend indicates a growing belief among traders in continued upward market momentum.
Interestingly, the analysis noted that the largest one-year inflow was recorded in leveraged ETFs tied to gold miners, suggesting a complex strategy of betting on volatility even within traditional safe-haven sectors. The data confirms that investors are currently prioritizing amplified gains over potential macroeconomic headwinds.
Price Action
Here’s a list of some bullish and bearish leveraged ETFs for investors to consider,
| Leveraged ETFs | YTD Performance | One-Year Performance |
| ProShares UltraPro QQQ (NASDAQ:TQQQ) | 33.36% | 50.49% |
| ProShares UltraPro S&P500 (NYSE:UPRO) | 28.21% | 34.47% |
| Direxion Daily S&P 500 Bull 3X Shares (NYSE:SPXL) | 27.99% | 34.30% |
| Direxion Daily Semiconductor Bull 3X Shares (NYSE:SOXL) | 33.21% | 5.43% |
| Direxion Daily Small Cap Bull 3x Shares (NYSE:TNA) | 8.71% | 7.76% |
| ProShares UltraPro Short QQQ (NASDAQ:SQQQ) | -52.11% | -60.86% |
| ProShares UltraPro Short S&P500 (NYSE:SPXU) | -41.18% | -46.31% |
| Direxion Daily Semiconductor Bear 3X Shares (BMV:SOXS) | -80.26% | -77.96% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Thursday. The SPY was up 0.15% at $669.42, while the QQQ advanced 0.33% to $605.25, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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