Best-Performing Leveraged ETFs of August

The S&P 500 logged its fourth successive month of gains to close out August. Even after the late last-week retreat, stocks managed to post gains for August. The S&P 500 advanced 1.5% during the month, while the Dow Jones rose 3.2%, marking the fourth successive monthly increase for both indexes, as quoted on Yahoo Finance. The S&P 500 hit a record high in August.

The Nasdaq capped the month with a 1.6% gain, notching its fifth consecutive monthly rise and its longest winning streak in nearly a year and a half, as quoted on Yahoo Finance. Small-cap stocks also thrived, with the Russell 2000 surging about 7% for August — its fourth consecutive monthly gain and strongest streak in over four years, as mentioned in the same Yahoo Finance article.

Inflation Data Above Fed’s Target

U.S. stocks slipped on Friday due to the release of the latest government data on inflation. The personal consumption expenditures price index showed that core inflation was a 2.9% seasonally adjusted in July, meeting estimates but higher than June, as quoted on CNBC. The persistence of inflation above the Fed’s 2% target is worrisome. The annual pace also marked the highest increase since February, as quoted on CNBC.

Consumer Sentiment Weakens

Adding to investor caution, consumer sentiment fell to a three-month low in August as tariff-related concerns about the economic outlook and inflation overpowered the sentiment, according to the University of Michigan’s closely watched survey. Respondents signaled expectations for faster inflation over the coming year.

Fed Rate Cut Bets Heighten

Despite the firmer inflation reading, bets on a rate cut in September remained strong. Traders continued to price in an 86.4% chance of a quarter-point reduction (at the time of writing), reflecting confidence that the Fed will ease monetary policy to counter a slowing labor market.

Inside the Ethereum Rally

Ethereum prices jumped about 26% over the past one month (as of Sept 1., 2025). ETFs like Bitwise Ethereum Strategy ETF AETH and VanEck Ethereum ETF ETHV hovered around a 52-week high in August. Strong institutional demand mainly led to the surge. Staking yields and Layer 2 scaling (per analysts) are other factors that kept Ethereum prices charged-up in August, as quoted on tradingnews.com.

Tech Sector Remained on Edge in August

The late part of August saw a volatile phase for the tech stocks, although the earlier part was steady. Talks of an AI bubble fear were prevalent in the market in August. OpenAI’s Sam Altman floated the talks, as quoted on CNBC. On the final day of the month, the tech-heavy Nasdaq Composite led the Wall Street pullback, due to a Big Tech rout.

NVIDIA Corp. NVDA lost over 3.3% on Aug. 29, 2025. Tesla TSLA shares retreated 3.5% on the day while Meta Platforms Inc. META shares were down 1.7% and Amazon.com, Inc. AMZN dived over 1.1%.

Winning Leveraged ETFs in Focus

Against this backdrop, below we highlight a few winning leveraged exchange-traded funds (ETFs) of the month of August.

AdvisorShares MSOS Daily Leveraged ETF MSOX – Up 164.8%

Cannabis stocks and ETFs soared in August after reports that President Donald Trump gave hints of considering reclassifying marijuana (as quoted on Wall Street Journal) to a less restrictive drug category. The likely move would shift marijuana from Schedule I, where it currently sits alongside heroin and cocaine, to Schedule III (as quoted on abcnews.com). This would be a beneficial step for the cannabis industry.

GraniteShares 2x Long RDDT Daily ETF RDTL – Up 81.8%

Reddit Inc RDDT shares surged about 50% over the past month. Reddit topped Q2 earnings and revenue estimates. Reddit is a social media and community-led platform that enables real-time discovery, conversation and engagement across a wide range of interest-based forums.

Defiance Daily Target 2X Short SMCI ETF SMCZ – Up 71.8%

Super Micro Computer Inc (SMCI) shares plunged more than 26% over the past month (as of Aug. 29, 2025).  The company indicated ongoing weaknesses in its internal control over financial reporting. In a regulatory filing submitted on Thursday, the company revealed that unresolved control issues may impact its reporting process, as quoted on Reuters. As a result, the inverse leveraged SMCI ETF gained last week.

MicroSectors Gold Miners 3X Leveraged ETN GDXU – Up 54.2%

VanEck Gold Miners ETF GDX has surged 20.4% over the past month. The yellow metal was up by 2.9% over the past month due to its safe-haven appeal. Since mining stocks often act as leveraged plays on the underlying metal, leveraged gold miners staged an impressive rally last month.

Tradr 2X Long APP Daily ETF APPX – Up 48.7%

Applovin Corp. APP shares advanced over 26% last month. AppLovin Corporation provides a technology platform, which enables developers to market, monetize, analyze and publish their apps. The stock surpassed Q2 earnings and revenue estimates in August. The ranks of the sector and the industry the stock hails from are positive. As a result, leveraged Applovin ETF APPX gained a lot.

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This article originally published on Zacks Investment Research (zacks.com).

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