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.
The U.S. stock market saw wild swings, while international markets experienced a smooth ride in the first quarter.
DFEN is a triple leveraged ETF tracking the Dow Jones US Select Aerospace and Defense index, aiming for 300% daily movement of its benchmark. We are bullish on GE Aerospace, Raytheon, and Lockheed Martin due to their strong government contracts, innovation, and strategic investments. Leveraged ETFs like DFEN should be held short-term to mitigate volatility and loss recoupment issues, especially around positive catalysts like earnings announcements.