We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Wall Street recorded a robust recovery in May, bouncing back from the early-April lows triggered by the so-called "Liberation Day" tariffs. According to Bespoke Investment Group, the S&P 500 recorded its fastest rebound since 1982, fueled by progress in trade talks, strong technology earnings and a resilient U.S. economy.
The market's surge has been widespread, with gains across sectors, suggesting investor confidence in the underlying fundamentals of the economy. We have highlighted a bunch of the best-performing leveraged equity ETFs from different corners of the market that gained in double digits in May. These include ProShares Ultra Ether ETF (ETHT - Free Report) , Direxion Daily Uranium Industry Bull 2X Shares (URAA - Free Report) , ProShares Ultra Semiconductors (USD - Free Report) , Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN - Free Report) and MAX Airlines 3X Leveraged ETN (JETU - Free Report) .
These funds seek to register big gains in a short span and will continue their strong trend, at least in the near term, provided the sentiments remain bullish. Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as swaps, futures contracts and other derivative instruments, to accomplish their objectives.
Easing Trade Tensions
Initial fears over aggressive tariff hikes began to subside as diplomatic progress was made. The United States temporarily reduced tariffs on Chinese imports from 145% to 30%, while China reciprocated by lowering its retaliatory tariffs from 125% to 10%. These reductions will remain in place for 90 days, offering a temporary reprieve for global markets (read: Court Ruling Lifts Markets: High Beta, Momentum ETFs in Focus).
Meanwhile, President Trump delayed a planned 50% tariff hike on all European Union goods, moving the date from June 1 to July 9. This postponement has injected new momentum into U.S.-EU trade negotiations, further boosting market sentiment.
Economic Resilience
Economic data in May reinforced the bullish tone. After five consecutive months of declines, consumer confidence rebounded. Inflation eased as well, with April’s Consumer Price Index rising just 2.3% year over year — its lowest pace since February 2021 and down from 2.4% in March.
The labor market remained solid, defying concerns over the tariff impacts. The U.S. economy added 177,000 jobs in May, surpassing expectations, while the unemployment rate held steady at 4.2%, underscoring continued economic strength.
Strong Tech Earnings
Corporate earnings season delivered mixed results overall, but the technology sector stood out. Of the 477 S&P 500 companies that reported first-quarter results, earnings grew 11.4% year over year on a 4.4% revenue increase. While only 62.9% of the firms beat revenue estimates, below recent norms, tech companies largely exceeded expectations. Notably, the revenue beat rate for tech surpassed the five-year average, signaling ongoing strength and investor appetite for high-growth sectors.
Lingering Concerns
Despite the rally, concerns remain. The trajectory of U.S. tariff policy continues to be uncertain. Some tariffs were ruled unlawful by the courts, only to be temporarily reinstated on appeal, creating a legal and regulatory rollercoaster that has injected volatility into markets. Additionally, the speed of the market's rebound has lifted valuations. The S&P 500 is now trading at over 22 times projected 2025 earnings, levels that analysts warn may be difficult to justify without continued economic and geopolitical progress.
ProShares Ultra Ether ETF offers two times (2x) the daily performance of the Bloomberg Ethereum Index, which is designed to measure the performance of a single ether traded in USD. It charges 94 bps in annual fees and trades in heavy volume of more than 4 million shares per day on average. ProShares Ultra Ether ETF has accumulated $180.3 million in its asset base (read: Ethereum ETFs Outperforming in May).
Direxion Daily Uranium Industry Bull 2X Shares (URAA - Free Report) – Up 51.6%
Direxion Daily Uranium Industry Bull 2X Shares seeks exposure to 200% of the performance of the Solactive United States Uranium and Nuclear Energy ETF Select Index. It charges 95 bps in annual fees and has AUM of $10.3 million. URAA trades in average daily volume of 50,000 shares.
ProShares Ultra Semiconductors (USD - Free Report) – Up 48.4%
ProShares Ultra Semiconductors offers two times exposure to the daily performance of the Dow Jones U.S. Semiconductors Index. It has gathered $1 billion in its asset base and charges 95 bps in fees per year from investors. USD trades in an average daily volume of 703,000 shares.
Direxion Daily Aerospace & Defense Bull 3X Shares creates a three times leveraged long position in the Dow Jones U.S. Select Aerospace & Defense Index. It charges an annual fee of 92 bps and trades in a good average daily volume of about 172,000 shares. Direxion Daily Aerospace & Defense Bull 3X Shares has AUM of $216.9 million.
MAX Airlines 3X Leveraged ETN (JETU - Free Report) – Up 41.7%
MAX Airlines 3X Leveraged ETN is linked to a 3X times leveraged participation in the daily performance of the Prime Airlines Index, charging 95 bps in annual fees. It has accumulated $3.2 million in its asset base and trades in an average daily volume of 3000 shares (read: Memorial Day Weekend Travel to Break Records: 5 ETF Picks).
Bottom Line
As a caveat, investors should note that these products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing, when combined with leverage, may make these products deviate significantly from the expected long-term performance figures (see: all the Leveraged Equity ETFs here).
Yet, for ETF investors who are bullish on these regions in the near term, any of the above-mentioned products can be an interesting choice. A near-term long could be intriguing for those with high risk tolerance and a belief that the trend is a friend in this corner of the investing world.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 Best-Performing Leveraged ETFs of May
Wall Street recorded a robust recovery in May, bouncing back from the early-April lows triggered by the so-called "Liberation Day" tariffs. According to Bespoke Investment Group, the S&P 500 recorded its fastest rebound since 1982, fueled by progress in trade talks, strong technology earnings and a resilient U.S. economy.
The market's surge has been widespread, with gains across sectors, suggesting investor confidence in the underlying fundamentals of the economy. We have highlighted a bunch of the best-performing leveraged equity ETFs from different corners of the market that gained in double digits in May. These include ProShares Ultra Ether ETF (ETHT - Free Report) , Direxion Daily Uranium Industry Bull 2X Shares (URAA - Free Report) , ProShares Ultra Semiconductors (USD - Free Report) , Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN - Free Report) and MAX Airlines 3X Leveraged ETN (JETU - Free Report) .
These funds seek to register big gains in a short span and will continue their strong trend, at least in the near term, provided the sentiments remain bullish. Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as swaps, futures contracts and other derivative instruments, to accomplish their objectives.
Easing Trade Tensions
Initial fears over aggressive tariff hikes began to subside as diplomatic progress was made. The United States temporarily reduced tariffs on Chinese imports from 145% to 30%, while China reciprocated by lowering its retaliatory tariffs from 125% to 10%. These reductions will remain in place for 90 days, offering a temporary reprieve for global markets (read: Court Ruling Lifts Markets: High Beta, Momentum ETFs in Focus).
Meanwhile, President Trump delayed a planned 50% tariff hike on all European Union goods, moving the date from June 1 to July 9. This postponement has injected new momentum into U.S.-EU trade negotiations, further boosting market sentiment.
Economic Resilience
Economic data in May reinforced the bullish tone. After five consecutive months of declines, consumer confidence rebounded. Inflation eased as well, with April’s Consumer Price Index rising just 2.3% year over year — its lowest pace since February 2021 and down from 2.4% in March.
The labor market remained solid, defying concerns over the tariff impacts. The U.S. economy added 177,000 jobs in May, surpassing expectations, while the unemployment rate held steady at 4.2%, underscoring continued economic strength.
Strong Tech Earnings
Corporate earnings season delivered mixed results overall, but the technology sector stood out. Of the 477 S&P 500 companies that reported first-quarter results, earnings grew 11.4% year over year on a 4.4% revenue increase. While only 62.9% of the firms beat revenue estimates, below recent norms, tech companies largely exceeded expectations. Notably, the revenue beat rate for tech surpassed the five-year average, signaling ongoing strength and investor appetite for high-growth sectors.
Lingering Concerns
Despite the rally, concerns remain. The trajectory of U.S. tariff policy continues to be uncertain. Some tariffs were ruled unlawful by the courts, only to be temporarily reinstated on appeal, creating a legal and regulatory rollercoaster that has injected volatility into markets. Additionally, the speed of the market's rebound has lifted valuations. The S&P 500 is now trading at over 22 times projected 2025 earnings, levels that analysts warn may be difficult to justify without continued economic and geopolitical progress.
Best Leveraged ETFs
ProShares Ultra Ether ETF (ETHT - Free Report) – Up 102.6%
ProShares Ultra Ether ETF offers two times (2x) the daily performance of the Bloomberg Ethereum Index, which is designed to measure the performance of a single ether traded in USD. It charges 94 bps in annual fees and trades in heavy volume of more than 4 million shares per day on average. ProShares Ultra Ether ETF has accumulated $180.3 million in its asset base (read: Ethereum ETFs Outperforming in May).
Direxion Daily Uranium Industry Bull 2X Shares (URAA - Free Report) – Up 51.6%
Direxion Daily Uranium Industry Bull 2X Shares seeks exposure to 200% of the performance of the Solactive United States Uranium and Nuclear Energy ETF Select Index. It charges 95 bps in annual fees and has AUM of $10.3 million. URAA trades in average daily volume of 50,000 shares.
ProShares Ultra Semiconductors (USD - Free Report) – Up 48.4%
ProShares Ultra Semiconductors offers two times exposure to the daily performance of the Dow Jones U.S. Semiconductors Index. It has gathered $1 billion in its asset base and charges 95 bps in fees per year from investors. USD trades in an average daily volume of 703,000 shares.
Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN - Free Report) – Up 42.4%
Direxion Daily Aerospace & Defense Bull 3X Shares creates a three times leveraged long position in the Dow Jones U.S. Select Aerospace & Defense Index. It charges an annual fee of 92 bps and trades in a good average daily volume of about 172,000 shares. Direxion Daily Aerospace & Defense Bull 3X Shares has AUM of $216.9 million.
MAX Airlines 3X Leveraged ETN (JETU - Free Report) – Up 41.7%
MAX Airlines 3X Leveraged ETN is linked to a 3X times leveraged participation in the daily performance of the Prime Airlines Index, charging 95 bps in annual fees. It has accumulated $3.2 million in its asset base and trades in an average daily volume of 3000 shares (read: Memorial Day Weekend Travel to Break Records: 5 ETF Picks).
Bottom Line
As a caveat, investors should note that these products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing, when combined with leverage, may make these products deviate significantly from the expected long-term performance figures (see: all the Leveraged Equity ETFs here).
Yet, for ETF investors who are bullish on these regions in the near term, any of the above-mentioned products can be an interesting choice. A near-term long could be intriguing for those with high risk tolerance and a belief that the trend is a friend in this corner of the investing world.