Market Volatility Has Led To Several Leveraged ETFs Setting New Records For Inflows And Outflows

Market Volatility Has Led To Several Leveraged ETFs Setting New Records For Inflows And Outflows

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

The first trading day of March was a pretty remarkable day in the ETF world.

That’s because as major indexes climbed anywhere from 3-5.5% after a week of heavy selling, several highly traded leveraged ETFs broke new records in either capital inflows or outflows. Two of those ETFs are of particular note for hitting new all-time cash flow records.

Though it’s impossible to determine whether inflows and outflows are the result of longs buying or shorts selling (or vice versa) they can be a useful tool in determining if a sudden change in sentiment is underway. What follows is a look at the circumstances that lead to the high dollar volume in each ETF as well as what the buying or selling might signal for the market now as traders grapple with the uncertainty that the coronavirus has brought upon global markets.


With an average daily volume of about 15.3 million shares, the Direxion Daily Gold Miners Index Bear 3X Shares DUST experienced record outflow on March 2, as stocks bounced off their lows and gold languished in a brief rut. All told, DUST saw a net outflow of -$114.1 million that day, roughly -$3.7 million more redemptions than the prior outflow record set in 2016 according to fund flow data from

The March redemptions followed a 2% decline in the price of gold after the commodity had rallied for the better part of the past year. However, the underlying NYSE Arca Gold Miners Index (GDMNTR) had recently risen more than 4%, likely a painful shock for the many short sellers that historically trade DUST.

What’s more, in the trading days immediately before and after the record outflow, the ETF posted two of its highest volume days on record. Nearly 51.6 million shares were traded during the Feb 28 session while roughly 51.1 million shares changed hands on the following Tuesday.

Since then, gold has rebounded close to its previous high and DUST has retreated back around year lows. Nevertheless, trading volume in the bearish gold fund has remained robust, topping its average trading volume every day since February 18.

Oddly, the same cannot be said for DUST’s bullish counterpart, the Direxion Daily Gold Miners Index Bull 3X Shares NUGT, which has seen elevated trading volume in that same span but not quite to the same degree as DUST. The comparatively low interest could be a sign that traders feel gold has hit a ceiling at its current 7-year high


One of the most heavily traded broad-based leveraged ETFs, the Direxion Daily S&P 500 Bull 3X Shares SPXL, saw its highest daily inflow ever. And the truly remarkable thing is the previous high wasn’t even close.

On Tuesday, March 3, SPXL saw $215.66 million in net inflows, again according to fund flow data from The next highest net inflow, way back in early-February 2018, saw the ETF garner $157.95 million.

And while not quite as heavily traded as the gold ETFs above, SPXL has seen its highest volume days in more than four years, most of it selling volume. This peaked on the final day of February with more than 20 million shares traded, more than four times its average volume.

Of course, SPXL’s bearish twin, the Direxion Daily S&P 500 Bear 3X Shares SPXS also received a fair amount of traction in this period. While SPXS’s fund flow didn’t register any records in terms of net deposits or redemptions, it did post two consecutive 53+ million share volume days on the final days of February, again, more than four times its average.

Uncertainty Going Forward

It’s difficult to draw definitive conclusions from this activity since the circumstances surrounding it are so extraordinary. However, the fact that traders are positioning themselves so heavily toward “normalization” or a return to the status quo—that stocks will continue to outperform and gold will retreat as fear leaves the market—does reveal that there is still faith in the decade-long bull market.

Whether or not that is the case is yet to be seen. At the very least, there are a lot of traders willing to trade that way.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate. An investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance quoted.

For standardized performance and the most recent month end performance click here (Provide link to )

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at A Fund’s prospectus and summary prospectus should be read carefully before investing.

Investing in a Direxion Shares ETF may be more volatile than investing in broadly diversified funds. The use of leverage by a Fund increases the risk to the Fund. The Direxion Shares ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment. 

Shares of the Direxion Shares are bought and sold at market price (not NAV) and are not individually redeemed from a Fund. Market Price returns are based upon the midpoint of the bid/ask spread at 4:00 pm EST (when NAV is normally calculated) and do not represent the returns you would receive if you traded shares at other times. Brokerage commissions will reduce returns. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV. Some performance results reflect expense reimbursements or recoupments and fee waivers in effect during certain periods shown. Absent these reimbursements or recoupments and fee waivers, results would have been less favorable.

Direxion Shares Risks - An investment in the ETFs involves risk, including the possible loss of principal. The ETFs are non-diversified and include risks associated with concentration that results from an ETF’s investments in a particular industry or sector which can increase volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. The ETFs do not attempt to, and should not be expected to, provide returns which are a multiple of the return of their respective index for periods other than a single day. For other risks including leverage, correlation, daily compounding, market volatility and risks specific to an industry or sector, please read the prospectus.

Distributor: Foreside Fund Services, LLC.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

Posted In: direxionNewsBroad U.S. Equity ETFsSpecialty ETFsCommoditiesMarketsETFs