Leveraged small-cap ETF TNA soars 117% in a year but loses over 5 years due to volatility decay.

Direxion's leveraged ETF TNA, designed to deliver 3x the daily return of the Russell 2000, has surged 117% over the past year amid steady market trends and low volatility. However, over five years, TNA has lost nearly 11% due to volatility decay, despite the Russell 2000 gaining 36%. This highlights the risks of holding leveraged ETFs long-term, as daily resets cause compounding losses in choppy markets. Traders use TNA for short-term bets around market events, but a return to high volatility could challenge its recent gains.