The Top Leveraged ETFs in Canada to Buy for March 2025

ByDan Kent Published On:

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        Key takeaways

        Not for long-term holding – Due to daily rebalancing and compounding effects, leveraged ETFs are best suited for short-term trades rather than buy-and-hold investing.

        Leveraged ETFs amplify market movements – These ETFs aim to deliver more than the daily returns of their underlying index, making them high-risk, high-reward tools for active traders.

        Sector and asset class diversity – From equities to commodities, these ETFs offer leveraged exposure to major markets like the S&P/TSX 60, NASDAQ-100, crude oil, and gold miners.

        One ETF I like way better than the ones on this list.

        At times, having exposure to a particular stock market index, a specific stock, or one of the prevalent Canadian ETFs may not suffice. We may want to escalate our exposure in an attempt to achieve higher returns, at the expense of potentially higher losses.

        To do this, investors can utilize leverage. However, there is one very important thing I want to go over first.

        A fair warning about leveraged ETFs

        Leveraged ETFs are risky. In fact, most investors should stay far away from them. They are not meant to be held long-term and should only be utilized in short-term trading strategies.

        Although I won’t review the risks in this article, things like volatility decay are real. An investor could get into a bit of trouble with leveraged ETFs, particularly those that are inverse ETFs, meaning they move opposite to the daily performance of a particular stock or index.

        If you want to invest in these types of ETFs, make sure you read the fund prospectus, research the overall strategy, and decide if you can handle the risks and if it’s right for you.

        There are two things I did not include in this article. Leveraged inverse ETFs and any 3X leveraged ETFs. If you’re looking for inverse exposure (daily bear ETFs), here is a post on the best inverse ETFs in Canada.

        If you’re looking for 3X ETFs, you’ll likely have to head south of the border, as we do not have many here in Canada. Of note, these funds pose significant risks. These investments should only be utilized by those with an exceptionally high tolerance for risk.

        Let’s dive right into it. You’ll notice one fund manager dominates the leveraged ETF scene. This is because most major fund managers here in Canada don’t dabble in this highly speculative area of the market.

        What are the best leveraged ETFs in Canada?

        Double the daily return of Canada’s blue-chip index

        BetaPro S&P/TSX 60 2X Daily Bull ETF (HXU.TO)

        HXU.TO provides 2x the daily performance of the S&P/TSX 60 Index, which tracks Canada’s 60 largest companies. It offers leveraged exposure to key sectors, including financials, energy, and materials.

        • Blue-chip Canadian exposure – The S&P/TSX 60 includes industry leaders such as Royal Bank, Shopify, and Canadian Natural Resources, providing diversified exposure to Canada’s economy.
        • Leverage amplifies short-term gains – Ideal for traders looking to capitalize on strong market trends with double the upside potential.
        • Heavy financial sector weighting – Canada’s banks dominate the index, benefiting from economic growth and interest rate trends.
        • Commodity-driven economy – With major oil and mining stocks, HXU benefits from rising energy and metal prices.
        • Canadian economic growth outlook – GDP expansion and corporate earnings trends impact TSX performance.
        • Bank of Canada rate decisions – Interest rate shifts influence bank profitability and borrowing costs.
        • Oil and materials prices – TSX’s heavy weighting in natural resources means commodity cycles affect returns.
        • High volatility – Leveraged ETFs magnify both gains and losses.
        • Sector concentration – Financials and energy stocks dominate, limiting diversification.
        • Compounding effects – Daily resets mean performance can diverge from 2x returns over time.

        Leveraged exposure to U.S. tech giants.

        BetaPro NASDAQ 100 2X Daily Bull ETF (HQU.TO)

        HQU.TO delivers 2x the daily return of the NASDAQ-100, which includes major tech stocks such as Apple, Microsoft, and Nvidia.

        • Tech sector strength – The NASDAQ-100 is dominated by high-growth tech firms, benefiting from AI, cloud computing, and e-commerce trends.
        • Momentum-driven trading – Ideal for capitalizing on short-term surges in tech stock prices.
        • U.S. market exposure – Gains from strong U.S. economic performance and innovation.
        • AI and semiconductor boom – Nvidia and AMD are key players in the AI revolution.
        • Fed interest rate policy – Tech stocks are sensitive to rate changes impacting valuations.
        • Earnings reports – High volatility around major tech earnings releases.
        • Tech sector corrections – Sharp downturns can lead to amplified losses.
        • Rate hikes hurt valuations – Growth stocks are pressured by rising borrowing costs.

        2x exposure to the world’s largest companies

        BetaPro S&P 500 2X Daily Bull ETF (TSE:HSU.TO)

        HSU.TO tracks 2x the daily returns of the S&P 500, providing exposure to major U.S. firms across all sectors.

        • Broad U.S. market exposure – Covers diverse sectors from tech to healthcare.
        • Strong historical performance – The S&P 500 has delivered steady long-term growth.
        • Favorable macro environment – U.S. economy remains resilient, supporting corporate earnings.
        • Earnings growth outlook – Corporate profitability will drive the index.
        • Interest rate trends – Fed policy impacts market sentiment.
        • Market-wide corrections – Downturns can lead to amplified downside.

        Doubled returns on Canada’s top banks

        BetaPro S&P/TSX Capped Financials 2X Daily Bull ETF (TSE:HFU)

        HFU.TO delivers 2x the daily returns of Canadian financial stocks, heavily weighted toward big banks like RBC, TD, and BMO.

        • Interest rate sensitivity – Rising rates boost bank profits through higher loan margins.
        • Dividend yield boost – Banks offer attractive payouts, appealing to yield-focused traders.
        • Mortgage market trends – Canada’s housing market is critical to bank performance.
        • Economic downturn impact – Recessions can lead to increased loan defaults.

        2x exposure to gold mining stocks

        BetaPro Canadian Gold Miners 2X Daily Bull ETF (TSE:HGU)

        HGU.TO provides leveraged exposure to Canadian gold miners, benefiting from gold price rallies and inflation hedging.

        • Safe-haven asset play – Gold tends to perform well during economic uncertainty.
        • Central bank gold purchases – Higher demand can push prices up.
        • Gold price volatility – Sudden price drops can erase gains quickly.

        Amplified silver market exposure

        BetaPro Silver 2X Daily Bull ETF (TSE:HZU)

        HZU.TO aims for 2x the daily returns of silver, attracting traders betting on precious metal price swings.

        • Industrial and monetary demand – Silver is used in tech and as a store of value.
        • EV and solar industry growth – Silver is essential in these technologies.
        • Highly volatile asset – Silver prices are more unpredictable than gold.

        Leverage on oil price movements

        BetaPro Crude Oil 2X Daily Bull ETF (HOU.TO)

        HOU.TO delivers 2x the daily performance of crude oil, benefiting from supply-demand imbalances.

        • Oil supply shocks – OPEC decisions and geopolitical tensions drive price swings.
        • Global energy demand – Economic growth boosts oil consumption.
        • Oil market instability – Price wars and supply fluctuations increase risk.

        A bonus longer-term leveraged ETF

        Enhanced returns from dividend-paying banks

        Hamilton Enhanced Canadian Bank ETF (HCAL.TO)

        Unlike BetaPro’s daily-reset ETFs, HCAL uses modest leverage (1.25x) to enhance long-term returns from Canada’s big banks.

        • Lower risk than 2x ETFs – More sustainable leverage approach.
        • Attractive dividend yield – Banks pay strong and growing dividends.
        • Bank earnings and rate trends – Directly impact HCAL’s performance.
        • Sector downturn risk – Financial stocks can struggle during recessions.

        Can I buy leveraged ETFs in a TFSA?

        Yes, buying leveraged ETFs inside of a TFSA is allowed. In fact, many investors who want to short the market, or in layperson’s terms, “bet on the market going down,” utilize leveraged inverse ETFs as they are not allowed to short stocks inside a TFSA.

        This is a dangerous endeavor, however, as leveraged ETFs can head south fairly quickly, and you can end up destroying one of the best tax-free investment vehicles you have in the Tax Free Savings Account. Ultimately, you can do what you’d like with your TFSA within the rules, but I would not utilize it to buy leveraged ETFs. There are many other ETFs for TFSAs.

        Why should you not hold leveraged ETFs?

        A leveraged ETF, by nature, will be more volatile than the underlying stock or index it covers. For this reason, if you cannot handle the additional volatility, you should not own leveraged ETFs.

        In addition to this, numerous studies have shown that leveraged ETFs, particularly those that carry large leverage and transaction costs like what we’ll go over below, are not good long-term holds. If you can handle the leverage component and want to buy and hold long-term, look to funds that utilize modest leverage, like 25%.

        Are 3x leveraged ETFs good for the long-term?

        3x leveraged ETFs, particularly those where the leverage resets daily, are not good long-term holds. Several factors make them poor investments to hold over the long term. One of the main reasons is volatility decay.

        Leveraged ETFs tend to decay due to the daily price movements in the fund and the fact the leverage typically resets daily. This can also be called volatility drag. We won’t go over volatility decay in this article, but you can read an outstanding post on it here.

        Can triple-leveraged ETFs go to zero?

        Because of the amplified leverage and the overall volatility decay of a 3x leveraged ETF, it can certainly go to zero.

        In the event the unit prices get low enough, funds can do a reverse split in an attempt to get the price back up and reduce the overall amount of units outstanding. However, if the fund is in bad enough shape, it could realistically just be closed down.

        Can you hold 2x leveraged ETF long term?

        Although 2X leveraged ETFs are better long-term holds than 3x leveraged ETFs, I still wouldn’t suggest buying and holding these long-term as decay still exists. You will likely find over time that these funds struggle to keep up with the underlying index they track for these reasons.

        If you buy these funds, do so as a trading strategy and have a firm entry/exit plan. The longer you hold, the larger your odds for underperformance.

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