Leveraged Equity Funds Draw Inflows as Volatility Rattles Returns

Weekly Channel Summary

The Leverage & Inverse channel ended the week with $183.22B in total AUM spread across 775 ETFs from 27 issuers. Net flows were positive at $681M over five days, extending a strong YTD total of $20,375M and a 1-Year figure of $24,174M. The channel continues to see robust demand despite a volatile week for leveraged and inverse performance across most asset classes.

This Week’s Performance Leaders and Laggards

Performance was broadly negative this week on a WTD basis, with only Leverage | Inverse – Fixed Income posting a gain of 0.96%. Leverage | Inverse – Crypto was the weakest category, falling 10.56% WTD and extending its steep YTD decline to -50.12%, the worst in the channel. Leverage | Inverse – Commodity also struggled, down 6.13% WTD and -18.05% YTD, while Leverage | Inverse – Single Stock fell 4.77% WTD despite a strong 45.37% YTD gain. A standout fund was BRZD, which surged 84.76% WTD as Brazil-focused inverse exposure swung sharply, contrasting with BRZL, which plunged 65.50% on the same country-specific volatility.

Top & Bottom 5 ETFs by Weekly Performance

The week’s top performers were dominated by Brazil-related leveraged and inverse products, led by BRZD at 84.76% and BZQ at 54.50%, reflecting a sharp reversal in Brazilian equity sentiment. TXXH also gained 32.84%, while ZSL rose 18.22% on silver weakness. On the downside, Brazil bull products including BRZL (-65.50%), UBR (-45.58%), and BRZU (-45.55%) suffered steep losses, underscoring the volatility of country-specific leveraged exposure this week.

Analyzing the Weekly Flows

Channel-wide net flows totaled $681M for the week, led decisively by the Leverage | Inverse – Equity category, which pulled in $548M and now shows $3,305M YTD. Leverage | Inverse – Single Stock added $130M for the week, bolstered by a massive $10,865M YTD figure and $15,468M over the past year. Leverage | Inverse – Commodity contributed $100M in weekly inflows, while Leverage | Inverse – Fixed Income posted the largest outflow at -$66M, consistent with its negative YTD and 1-Year trends. Leverage | Inverse – Crypto also saw outflows of -$31M for the week despite a positive YTD total of $1,190M.

Category Flows Summary

Top & Bottom 5 ETFs by 5-Day Flow

TQQQ led all funds with $904M in weekly inflows, followed by SOXS at $518M, reflecting strong demand for both leveraged bullish and bearish tech exposure. On the outflow side, SOXL saw the largest redemptions at -$931M, while MUU followed with -$263M in outflows. The divergence between SOXL and SOXS flows suggests investors rotated semiconductor sector exposure from bullish to bearish positioning during the week.

Issuer League Table Update

ProShares remains the dominant issuer by market share at 46.16% ($84.58B), followed by Direxion at 36.89% ($67.59B), together accounting for the majority of channel AUM. ProShares also led weekly inflows with $1,197M, well ahead of GraniteShares’ $180M, reinforcing its position as the primary beneficiary of this week’s leveraged equity demand. Direxion, despite its large AUM base, recorded the largest weekly outflow among issuers at -$723M, driven primarily by redemptions in SOXL and MUU. Volatility Shares and Roundhill rounded out the outflow list with more modest redemptions of -$32M and -$28M, respectively.

Top 5 Issuers by AUM

Top & Bottom 3 Issuers by 5-Day Flow