Top Performing Leveraged/Inverse ETFs: 07/13/2025

Leveraged and inverse ETFs posted significant gains last week, predominantly driven by sector-specific catalysts. The AdvisorShares MSOS Daily Leveraged ETF (MSOX) led with a 40.35% return, fueled by speculation of cannabis rescheduling. Crypto-related funds, including Ether (e.g., ETHU up 35.42%) and Bitcoin ETFs, also saw substantial increases due to reinvigorated institutional demand and legislative optimism. Other notable performers included the inverse Brazil ETF (BZQ), gaining 12.61% on new US tariffs, and ProShares Ultra Silver (AGQ), up 11.51% amid safe-haven demand, highlighting how specific regulatory, geopolitical, and market catalysts are amplifying returns in these high-volatility instruments.

Analysis

Last week's top-performing leveraged and inverse ETFs were primarily driven by distinct, event-specific catalysts rather than broad market momentum. The crypto and crypto-proxy space was a dominant theme, with six of the top ten performers linked to the asset class. Ether-focused ETFs like ETHU and ETHT surged approximately 35% on renewed institutional demand and optimism for wider adoption, while Bitcoin-related ETFs (BITU, BITX, BTFX) posted gains around 16% in anticipation of constructive U.S. regulatory debates during "Crypto Week." Regulatory speculation was also the key driver for the top performer, AdvisorShares MSOS Daily Leveraged ETF (MSOX), which returned over 40% following suggestions of potential U.S. cannabis rescheduling. Geopolitical events created opportunities on the short side, with the ProShares UltraShort MSCI Brazil Capped ETF (BZQ) gaining 12.61% after the U.S. imposed 50% tariffs on Brazilian imports. Finally, the ProShares Ultra Silver ETF (AGQ) rose 11.51%, benefiting from a combination of a technical price breakout and safe-haven buying amidst global uncertainties.

Key Decisions for Investors

• Investors should recognize that these significant gains are tied to short-term, event-driven catalysts, and must monitor developments in crypto regulation, U.S. cannabis policy, and trade disputes to assess the durability of these trends.
• For traders with high-risk tolerance and a bullish view on crypto, the performance of leveraged ETFs on single stocks like Coinbase (CONL) and MicroStrategy (MSTX) presents a viable, albeit more volatile, alternative to directly tracking the underlying assets.
• The inverse Brazil ETF's (BZQ) performance highlights the utility of such instruments for tactically hedging or speculating on specific geopolitical events, such as the imposition of tariffs.
• The concurrent rally in a risk-on asset class like crypto and a safe-haven asset like silver (AGQ) suggests a complex market environment, warranting a nuanced approach to risk positioning rather than a simple risk-on or risk-off stance.