US leveraged ETFs reach $198 billion record as AI‑driven semiconductor funds surge

Global investors have poured record capital into leveraged exchange‑traded funds, driving total assets under management to about $198 billion. The surge is led by two products: ProShares UltraPro QQQ (TQQQ), which tracks three times the daily return of the Nasdaq‑100, and Direxion Daily Semiconductor Bull 3X Shares (SOXL), which focuses on semiconductor stocks tied to AI infrastructure.

The growth reflects the broader AI‑fuelled rally in the semiconductor sector, with SOXL posting year‑to‑date returns exceeding 50% in 2026. Analysts note that leveraged ETFs "are designed to reset daily, which means their returns over longer periods can diverge significantly from what you’d expect by simply multiplying the index return by three" and warn that the massive inflows amplify market volatility through daily rebalancing trades.

While the rapid expansion offers high upside, the products carry heightened risk: daily rebalancing can exacerbate price swings, and a slowdown in AI spending could cause leveraged losses to multiply. Regulators continue to stress that these instruments are intended for short‑term trading rather than long‑term investment.