Republican Donald Trump’s historic victory in the presidential race unleashed a massive rally in the U.S. stock market, with all three major indices hitting all-time highs. The Dow Jones Industrial jumped 3.5% in its best day since November 2022 while the tech-heavy Nasdaq Composite Index rose 2.9%. The S&P 500 saw its best post-Election Day in its history, climbing 2.5% and surpassing the 5,900 level. A gauge of the “Magnificent Seven” also hit a record, led by Tesla’s (TSLA) 15% surge. 

Trump staged a remarkable comeback with potential control over the House and Senate. With this, investors turned to the so-called Trump trade of pro-growth, pro-deregulation and pro-markets. This raised the appeal for leveraged ETFs as investors looked to register big gains in a short span. 

We have highlighted five of the best-performing leveraged ETFs that gained the most following the election result. These are GraniteShares 2X Long COIN Daily ETF CONL, Direxion Daily Regional Banks Bull 3x Shares DPST, GraniteShares 2x Long TSLA Daily ETF TSLR, T-REX 2X Long MSTR Daily Target ETF MSTU and ProShares UltraPro Russell2000 URTY. These funds seek to register big gains in a short span and will continue their strong trend, at least in the near term, provided the sentiments remain bullish.

Analysts expect Trump's victory to lead to faster economic growth and more market-friendly policies. This is because Trump supports lower corporate tax rates, deregulation and industrial policies that favor domestic growth, all of which will provide more stimulus to the U.S. economy and benefit riskier assets (read: ETFs Set to Soar on Trump's Presidential Victory).

In particular, Trump’s proposed tariffs against major U.S. trading partners would boost the greenback, strengthening sectors like banks, technology, defense and fossil fuels. Bitcoin is viewed as one of the Trump trades as he embraced digital assets during his campaign. Donald Trump is supportive of cryptocurrencies and has vowed to make the United States the crypto capital of the planet.

Leveraged ETFs

Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as the use of swaps, futures contracts and other derivative instruments to accomplish their objectives. Due to their compounding effect, investors can enjoy higher returns in a short period, provided the trend remains a friend.

Since most of these ETFs seek to attain their goals on a daily basis, their performances could vary significantly from the performance of their underlying index or benchmark over a longer period compared with a shorter period (such as weeks, months or years) due to their compounding effect (see: all Leveraged Equity ETFs here). 

Investors should also note that leveraged ETFs involve a greater degree of risk than traditional funds. They are often more costly and can be less tax-efficient, as they can realize capital gains through swaps and other derivative instruments.

ETFs That Gained the Most

GraniteShares 2X Long COIN Daily ETF (CONL) – Up 61.5%

GraniteShares 2x Long COIN Daily ETF seeks 2 times (200%) the daily percentage change of the common stock of Coinbase Global (COIN). It has accumulated $517.5 million in its asset base while trading in an average daily volume of 6.2 million shares. GraniteShares 1.5x Long COIN Daily ETF charges 1.15% in annual fees.

Direxion Daily Regional Banks Bull 3x Shares (DPST) - Up 40%

Direxion Daily Regional Banks Bull 3x Shares seeks to deliver thrice (300%) the returns of the S&P Regional Banks Select Industry Index, charging 90 bps in fees per year. DPST has accumulated $735.4 million in its asset base and trades in a moderate volume of around 1.1 million shares a day on average.

GraniteShares 2x Long TSLA Daily ETF (TSLR) – Up 29.4%

GraniteShares 2x Long TSLA Daily ETF also seeks to offer two times (200%) the daily percentage change of the common stock of Tesla, charging 95 bps in annual fees. It has managed assets worth $56.1 million in its asset base (read: Tesla Records its Best Day in 11 Years: 5 ETF Winners).

T-REX 2X Long MSTR Daily Target ETF (MSTU) – Up 25.6%

T-REX 2X Long MSTR Daily Target ETF seeks to magnify two times (200%) the return on the publicly traded common stock of MicroStrategy (MSTR). Its expense ratio is 1.05% and it trades in a volume of 3.7 million shares. MSTU has AUM of $686 million. 

ProShares UltraPro Russell2000 (URTY) – Up 17.3%

ProShares UltraPro Russell2000 provides triple exposure to the small-cap Russell 2000 Index. It is less popular and less liquid in the leveraged small-cap space, with AUM of $430.1 million and an average daily volume of 1.2 million shares. URTY charges 95 bps in annual fees.

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