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Leveraged ETFs surge but magnify losses, as recent tech sell-off wiped 23% in a day for some funds.

Market News
24 Jun 2026
24/7 Wall Street
View Source
Bearish
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Leveraged ETFs, which aim to multiply daily market returns, have grown rapidly, reaching $198 billion in assets. These funds use borrowed money and derivatives to amplify gains but also losses, as shown by a recent tech sell-off where semiconductor-focused SOXL lost over 23% in one day. While attractive in rising markets, their daily rebalancing can erode returns in volatile conditions, making them risky for long-term holding. Investors should view leveraged ETFs as short-term trading tools rather than buy-and-hold investments.

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