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Leveraged ETF trading swings as investors favor plain-vanilla funds
Despite volatile leveraged and inverse single-stock launches, nearly $200 billion year-to-date flowed into broad “boring beta” ETFs like VOO and SPY, while some speculative chip and crypto-linked products saw sharp drawdowns.
ETF Zoo discussed how the first half of 2026 has featured both strong gains and notable losses across exchange-traded products, with flows into leveraged strategies rising even as the broader market stayed flat to down, according to Yahoo Finance.
The panel highlighted that hype around AI and semiconductors has not prevented sizable inflows into plain-vanilla index ETFs. Eric Balchunas said nearly $200 billion year-to-date has gone into products such as VOO, SPY, IVV, and VTI, while investors appear less interested in commodities, crypto, and private credit as diversifiers.
On the speculative side, the Roundhill DRAM memory-chip ETF was described as a “poster child” for 2026 speculation, including a reference point where it broke iShares Bitcoin ETF IBIT’s inflow record, then later took a 40% price hit. Even after the decline, the discussion said the ETF’s assets barely moved from a roughly $25 billion peak because buying reportedly continued.
The segment also pointed to the risks around leveraged and inverse single-stock ETFs linked to thematic moments, citing one product launched around the SpaceX IPO that cratered nearly 30% in a week. Yahoo Finance also noted Balchunas’ view that despite the swings, ETFs such as TQQQ have still produced tens of billions in real investor gains.
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