Top Performing Leveraged/Inverse ETFs: 09/07/2025

Leveraged and inverse ETFs delivered strong performance last week, with RiverNorth Active Income ETF (CEFZ) leading with a 55.98% return. Sector-specific catalysts included robust earnings from Hims & Hers and Broadcom, a favorable antitrust ruling for Google, and positive biotech clinical trial results. Broader market drivers, such as expectations for September interest rate cuts, significantly boosted homebuilders and gold-related assets, while strong consumer spending supported retail ETFs. These substantial gains highlight the amplified returns possible with leveraged products, driven by a combination of company-specific catalysts and shifting macroeconomic sentiment.

Analysis

Leveraged exchange-traded funds (ETFs) delivered significant returns last week, driven by a combination of company-specific news and shifting macroeconomic sentiment. In the technology sector, the Defiance Daily Target 2X Long AVGO ETF (AVGX) gained over 25% following a positive earnings report from Broadcom, while the Direxion Daily GOOGL Bull 2X Shares (GGLL) rose approximately 20% after a judge rejected a Department of Justice breakup call for Google. The healthcare space also showed strength, with the Defiance Daily Target 2X Long HIMS ETF (HIMZ) surging 28.3% on the back of strong revenue growth and an expanding subscriber base for Hims & Hers Health. Macroeconomic factors were a primary driver for other top performers. Expectations of a September interest rate cut and a weaker dollar fueled rallies in homebuilders and precious metals, leading to gains of 16.28% for the Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL) and between 11.9% and 15.9% for gold and gold miner ETFs like GDXU, SHNY, and JNUG. Furthermore, strong economic data, including a reported 3.3% annualized real GDP growth and a 1.6% rise in consumer spending for Q2 2025, supported a 10.89% gain in the Direxion Daily Retail Bull 3X Shares (RETL). The week's top performer, RiverNorth Active Income ETF (CEFZ), posted an exceptional 55.98% gain, attributed to strong performance in its underlying assets.

Key Decisions for Investors

• The strong performance across these leveraged ETFs underscores their utility for tactical, short-term trades based on specific catalysts like earnings reports (AVGO), legal rulings (GOOGL), or clinical trial data (LABU), but their volatility necessitates active management and is unsuitable for long-term holds.
• Investors with a bullish view on falling interest rates should monitor homebuilder (NAIL) and gold-related (GDXU, SHNY, JNUG) leveraged ETFs, as their recent performance demonstrates high sensitivity to Fed policy expectations and dollar weakness.
• Given the positive catalysts in technology and retail, consider using leveraged ETFs like GGLL and RETL to amplify exposure to positive sector-specific news, but remain aware of the inherent daily rebalancing risk and potential for rapid reversals.
• The outsized 55.98% return in the RiverNorth Active Income ETF (CEFZ) warrants further due diligence into its underlying holdings to understand the specific drivers, as its performance significantly outpaced other funds driven by more transparent, event-driven news.