Global geopolitical risks continue to place an onus on nations to bolster spending to enhance their defensive capabilities. In turn, this continues to feed into strength for the aerospace and defense (A&D) sector, which creates plenty of opportunities for traders.
Direxion Daily Aerospace & Defense Bull 3X Shares is rated a strong buy due to robust defense spending trends and geopolitical momentum. DFEN benefits from surging European demand for US armaments, NATO's 5% defense spending target, and multi-year contracts favoring US defense companies. Recent geopolitical tensions and shifting rhetoric between the US and Russia further fuel short-term momentum for DFEN.
In this risk-on market, levered themes have gathered inflows along with some outsized YTD returns. Many of today's levered ETFs are single-stock ETFs focused on high-flying companies such as Palantir.
URAA, FNGU, USD, LMBO and DFEN soared more than 60% in Q2 as AI-driven tech, a dovish Fed and momentum buying lifted leveraged ETF returns.
GDXU, KORU, DFEN and others soared in the first half of 2025 as AI momentum, global stimulus, and gold gains fueled leveraged ETF outperformance.
DFEN offers 3x daily leveraged exposure to the aerospace & defense sector, benefiting from global military spending trends and potential large-scale US defense projects. Recent geopolitical tensions and proposed US defense initiatives, like the Golden Dome, support a bullish outlook for the sector and DFEN's growth potential. Leveraged ETFs like DFEN can amplify both gains and losses; setting strict risk management and exit strategies is crucial for investors.
Europe's push to boost its defense spending and rearmament could uplift a pair of leverage ETFs: the Direxion Daily FTSE Europe Bull 3X ETF (EURL) and the Direxion Daily Aerospace & Defense Bull 3X Shares ETF (DFEN).
In times of market uncertainty, the go-to strategy is to get defensive. For traders looking to profit, that doesn't mean adding safe haven assets, but considering the aerospace and defense (A&D) industry.
Global military spending is accelerating, with total worldwide military expenditures for 2024 estimated at $2.72 trillion. This marks a 9.4% increase in real terms over 2023 levels and the sharpest year-over-year (YOY) rise in decades.
ETHT, URAA, USD, DFEN and JETU are leading as easing tariffs, strong tech earnings and economic resilience fuel a market rebound.
Top Performing Leveraged/Inverse ETFs Last Week These were last week's top performing leveraged and inverse ETFs. Note that because of leverage, these kinds of funds can move quickly.
The current uncertain environment boosts demand for leveraged and inverse-leveraged ETFs.