The Russell 2000 Leveraged ETF group is particularly compelling to investors because of the wider range of stocks, and the focus on small-caps, which are typically growth oriented.
A leveraged exchange-traded fund is a type of marketable security that uses financial derivatives such as options contracts, futures, margin accounts, and debt to boost the returns of an underlying index. While a traditional ETF typically follows the securities in its underlying index on a one-to-one basis, a leveraged ETF may aim for a 2:1 or 3:1 ratio. These ETFs can be designed for both short and long trades, so investors can access the upside and downside of market activity.
While there are a number of leveraged ETFs for underlying indices such as the S&P 500 and the Dow Jones Industrial Average, the Russell 2000 Leveraged ETF group is particularly compelling to investors because of the wider range of stocks, and the focus on small-caps, which are typically growth oriented. Russell 2000 ETFs closely track the Russell 2000 Index, which combines 2000 of the small-cap companies in the Russell universe of 3000 stocks. The Russell 3000 tracks nearly 98% of all publicly traded U.S. stocks.
Here are 8 leveraged Russell 2000 ETF funds for investors:
Direxion Daily Small Cap Bull 3x Shares (TNA )
The Direxion Daily Small Cap Bull 3X Shares seeks the daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the Russell 2000® Index. There is no guarantee the funds will meet their stated investment objectives. This leveraged ETF seeks a return that is 300% or -300% of the return of their benchmark index for a single day. The fund should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day. The ETF expense ratio is 1.14%, and the fund has assets under management of $722.70M.
Direxion Daily Small Cap Bear 3X Shares (TZA )
The Direxion Daily Small Cap Bear 3X Shares seeks the daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the Russell 2000® Index. There is no guarantee the funds will meet their stated investment objectives. This leveraged ETF seesk a return that is 300% or -300% of the return of their benchmark index for a single day. The fund should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day. The ETF expense ratio is 1.14%, and the fund has assets under management of $339.60M.
ProShares Short Russell2000 (RWM )
This short ProShares ETF seeks a return that is -1x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. The Expense ratio is 0.95%, and the fund has assets under management of $304.71M.
ProShares Ultra Russell2000 (UWM )
This leveraged ProShares ETF seeks a return that is 2x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. The ETF expense ratio is 0.95%, and the fund has assets under management of $193.40M.
ProShares UltraPro Russell2000 (URTY )
This leveraged ProShares ETF seeks a return that is 3x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. The ETF expense ratio is 0.95% and the fund has assets under management of $91.43M.
ProShares UltraShort Russell2000 (TWM )
This short ProShares ETF seeks a return that is -2x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. The ETF expense ratio is 0.95%, and the fund has assets under management of $85.34M.
ProShares UltraPro Short Russell2000 (SRTY )
This short ProShares ETF seeks a return that is -3x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings as frequently as daily. The ETF expense ratio is 0.95%, and the fund has assets under management of $62.29M.
Direxion Daily Small Cap Bull 2X Shares (SMLL )
The Direxion Daily Small Cap Bull 2X Shares seeks daily investment results, before fees and expenses, of 200% of the performance of the Russell 2000® Index. There is no guarantee the fund will meet its stated investment objective. This leveraged ETF seeks a return that is 200% the return of its benchmark index for a single day. The fund should not be expected to provide two times the return of the benchmark’s cumulative return for periods greater than a day. The ETF expense ratio is 0.79%, and the fund has assets under management of $3.06M.
For more leveraged ETF strategies, visit our Leveraged & Inverse ETF Channel.
