Top Performing Leveraged/Inverse ETFs: 08/24/2025

Last week's top-performing leveraged and inverse ETFs recorded substantial gains, reflecting diverse market catalysts. The RiverNorth Active Income ETF (CEFZ) led with a 55.98% return, its third consecutive week as a top performer, while cryptocurrency-linked funds like RIOX and Ether-focused ETFs surged up to 32% amid Ether's new all-time high and strong crypto sentiment. Other significant drivers included a dovish Fed pivot boosting regional banks (DPST) and travel stocks (FLYU), optimism for cannabis regulatory changes (MSOX), a tech rally in China (CHAU), and commodity plays like inverse natural gas (KOLD) and leveraged oil (NRGU), highlighting varied sector-specific and macro-driven opportunities for high-conviction plays.

Analysis

Last week's top-performing leveraged ETFs were driven by a diverse set of distinct, theme-specific catalysts rather than a broad market trend. Monetary policy expectations were a significant factor, with the Federal Reserve's dovish pivot boosting the Direxion Daily Regional Banks Bull 3X Shares (DPST) by 15.75% and the MicroSectors Travel 3x Leveraged ETN (FLYU) by 10.88% on prospects of cheaper credit and increased consumer spending. The cryptocurrency space showed strong momentum, particularly in Ether, which propelled ProShares Ultra Ether ETF (ETHT) and 2x Ether ETF (ETHU) up by approximately 19% as Ether reached a new all-time high above $4,900 amid signs of weakening Bitcoin momentum. In commodities, opposing trends were evident: the ProShares UltraShort Bloomberg Natural Gas (KOLD) gained over 13% as natural gas prices fell on weather forecasts, while the MicroSectors U.S. Big Oil 3x Leveraged ETN (NRGU) rose 11.17% on higher oil prices linked to geopolitical news and inventory drawdowns. Sector-specific events also created significant opportunities, with the AdvisorShares MSOS Daily Leveraged ETF (MSOX) gaining 18.11% on optimism for U.S. cannabis regulation, and the Direxion Daily CSI 300 China A Share Bull 2x Shares (CHAU) rising 11.74% on a domestic tech rally and speculation of capital rotation. The top performer, RiverNorth Active Income ETF (CEFZ), was an outlier with a 55.98% gain, reflecting its unique structural transition from a mutual fund.

Key Decisions for Investors

• Given the varied drivers, investors should consider these returns as signals for tactical, high-conviction trades in specific themes like Federal Reserve policy impact on cyclicals (DPST, FLYU), the ongoing strength in Ether (ETHT, ETHU), or event-driven plays in cannabis (MSOX).
• It is crucial to recognize the high-risk, short-term nature of these leveraged products; their performance is tightly linked to specific catalysts, such as regulatory news for cannabis or weather forecasts for natural gas, which can reverse rapidly.
• Investors should closely monitor key macro indicators, such as central bank communications for rate-sensitive assets and commodity-specific data like inventory levels and geopolitical developments, to manage positions in these volatile instruments effectively.