7 Top-Performing Leveraged ETFs Of 2017

Direxion Daily MSCI Emerging Markets Bull and Bear 3X Shares (EDC - Free Report) – Up 130.8%

This ETF targets the emerging market with 3x leveraged exposure to the MSCI Emerging Markets Index. After many years of underperformance, low valuations have made emerging market products especially appealing to investors. EDC has amassed about $299.5 million in its asset base while charges 95 bps in fees per year from investors. Volume is moderate as it exchanges around 177,000 shares a day on average.

Direxion Daily Technology Bull 3x Shares (TECL - Free Report) – Up 128%

This ETF targets the broad U.S. technology sector with 3x leveraged exposure to the Technology Select Sector Index. The outperformance is likely to continue heading into the New Year, given expectations of strong earnings, improved overseas industry demand, and innovative technologies. The fund has amassed about $515.8 million in its asset base while charges 95 bps in fees per year from investors. Volume is good as it exchanges around 146,000 shares a day on average.

Bottom Line

While this strategy is highly beneficial for short-term traders, it could lead to huge losses compared with traditional funds in fluctuating or seesaw markets. Further, their performances could vary significantly from the actual performance of their underlying index over a longer period when compared with the shorter period (such as, weeks or months) due to their compounding effect.

Still, for ETF investors who are bullish on global equities for the near term, either of the above products could make an interesting choice. Clearly, 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.

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