List of 3x etfs?
Understanding 3x ETFs
As with other leveraged ETFs, 3x ETFs track a wide variety of asset classes, such as stocks, bonds, and commodity futures. The difference is that 3x ETFs apply even greater leverage to try to gain three times the daily or monthly return of their respective underlying indexes.
| Symbol Symbol | ETF Name ETF Name | 1 Year 1 Year |
|---|---|---|
| SPXL | Direxion Daily S&P 500 Bull 3X Shares | 68.51% |
| SQQQ | ProShares UltraPro Short QQQ | -73.13% |
| FNGU | MicroSectors FANG+™ Index 3X Leveraged ETN | 405.71% |
| TECL | Direxion Daily Technology Bull 3X Shares | 212.50% |
Understanding 3x ETFs
As with other leveraged ETFs, 3x ETFs track a wide variety of asset classes, such as stocks, bonds, and commodity futures. The difference is that 3x ETFs apply even greater leverage to try to gain three times the daily or monthly return of their respective underlying indexes.
The objective of the ETP Securities is to provide 5 times the value of the daily performance of the SPDR S&P 500 ETF Trust Exchange Traded Fund, net of fees and expenses. The ETP securities seek to pursue the 5x Long US 5.
| Rank | Symbol | Fund Name |
|---|---|---|
| 1 | SPY | SPDR S&P 500 ETF Trust |
| 2 | IVV | iShares Core S&P 500 ETF |
| 3 | VOO | Vanguard S&P 500 ETF |
| 4 | VTI | Vanguard Total Stock Market ETF |
Bank of Montreal Launches 4X Leveraged S&P 500 Product - ETF Focus on TheStreet: ETF research and Trade Ideas.
Direxion launched its first leveraged ETFs in 2008. In November 2008 the company was the first to offer ETFs with 3X leverage, a move that was copied some months later by its competitors ProShares and Rydex Investments.
ProShares UltraPro QQQ TQQQ
ProShares UltraPro QQQ is the most popular and liquid ETF in the leveraged space, with AUM of $11.4 billion and an average daily volume of 172.7 million shares a day.
The TQQQ is a 3x leveraged ETF based on the QQQ (a Nasdaq-100 Index ETF). Because it is leveraged, it uses derivatives contracts to amplify its returns based on how the index performs. As such, it does not actually hold the shares of any companies. Instead, the unleveraged QQQ itself owns the companies in the index.
Further, we see that the sweet spot for leverage is around 2x. At 3x leverage, the returns don't improve enough to compensate for the additional risk. While the 3x variant shows potential in the bull market after 2008, reaping these returns would require the successful management of drawdowns first.
Is 7 ETFs too many?
For most personal investors, an optimal number of ETFs to hold would be 5 to 10 across asset classes, geographies, and other characteristics.
Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation.
The Direxion Daily S&P 500® Bull 2X Shares seeks daily investment results, before fees and expenses, of 200% of the performance of the S&P 500® Index.
| | Ticker | ETF Name |
|---|---|---|
| 1 | SMH | VanEck Semiconductors ETF |
| 2 | XLK | Technology Select Sector SPDR Fund |
| 3 | IXN | iShares Global Tech ETF |
| 4 | IWY | iShares Russell Top 200 Growth ETF |
Mutual funds and ETFs may hold stocks, bonds, or commodities. Both can track indexes, but ETFs tend to be more cost-effective and liquid since they trade on exchanges like shares of stock. Mutual funds can offer active management and greater regulatory oversight at a higher cost and only allow transactions once daily.
- iShares Russell Top 200 Growth ETF (NYSE:IWY) Annualized Return Over 10 Years: 16.09% ...
- Invesco QQQ Trust (NASDAQ:QQQ) Annualized Return Over 10 Years: 17.92% ...
- Vanguard Information Technology Index Fund (NYSE:VGT) 10-Year Daily Total Returns: 19.52%
Because they rebalance daily, leveraged ETFs usually never lose all of their value. They can, however, fall toward zero over time. If a leveraged ETF approaches zero, its manager typically liquidates its assets and pays out all remaining holders in cash.
Leveraged ETFs decay due to the compounding effect of daily returns, volatility of the market and the cost of leverage. The volatility drag of leveraged ETFs means that losses in the ETF can be magnified over time and they are not suitable for long-term investments.
Because they rebalance daily, leveraged ETFs usually never lose all of their value. They can, however, fall toward zero over time. If a leveraged ETF approaches zero, its manager typically liquidates its assets and pays out all remaining holders in cash.
SPY - Performance Comparison. In the year-to-date period, SPXL achieves a 3.53% return, which is significantly higher than SPY's 1.50% return. Over the past 10 years, SPXL has outperformed SPY with an annualized return of 22.13%, while SPY has yielded a comparatively lower 12.14% annualized return.
Can you lose more than you invest in leveraged ETFs?
If you own a leveraged ETF you can't lose more than your initial investment amount. You would never be liable for more than you invested; in a sense, the amount you could lose is capped.
Several papers have established that investors who hold these investments for periods longer than a day expose themselves to substantial risk as the holding period returns will deviate from the returns to a leveraged or inverse investment in the index.
| ETF | Assets under management | Trailing 12-month dividend yield |
|---|---|---|
| iShares Mortgage Real Estate ETF (REM) | $636 million | 9.5% |
| BlackRock Floating Rate Loan ETF (BRLN) | $21 million | 9.1% |
| Global X S&P 500 Covered Call ETF (XYLD) | $2.8 billion | 10.9% |
| SPDR Bloomberg High Yield Bond ETF (JNK) | $8.9 billion | 6.4% |
Key Takeaways. Leveraged ETFs are exchange-traded funds that use derivatives and debt instruments to magnify the returns of a benchmark or index. Leveraged ETFs can generate returns very quickly, but they are also very risky.
| Company | Symbol | Total Net Assets |
|---|---|---|
| Apple Inc. | AAPL | 2.83% |
| Microsoft Corp. | MSFT | 2.64% |
| Amazon.com Inc. | AMZN | 1.48% |
| Broadcom Inc. | AVGO | 1.27% |
