SPXL vs. SSO: Which Leveraged S&P 500 ETF Is Right for You?

The ProShares - Ultra S&P 500 ETF (SSO 1.16%) and the Direxion Daily S&P 500 Bull 3X ETF (SPXL 1.78%) are both designed for investors seeking magnified daily moves of the S&P 500, using derivatives to achieve 2x and 3x daily returns, respectively.

This comparison highlights how the two funds stack up in terms of cost, risk, performance, and portfolio makeup for anyone considering leveraged S&P 500 exposure.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.

SPXL has the advantage on fees and income, with a marginally lower expense ratio and higher dividend yield. While these are factors to consider with any investment, they may be less important considerations for short-term trades like leveraged ETFs.

Performance & risk comparison

What’s inside

SPXL is built for aggressive traders, aiming for three times the daily movement of the S&P 500. Its top holdings are in line with the S&P 500, with Nvidia, Apple, and Microsoft rounding out the top three. Like SSO, SPXL resets its leverage daily, which can cause its performance to diverge from the index over longer periods.

SSO, meanwhile, uses a similar leveraged strategy but targets 2x daily returns on the S&P 500. Both funds are designed for tactical trading — not long-term buy-and-hold investing — due to the compounding effects of daily leverage resets.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Both SSO and SPXL offer leveraged exposure to the S&P 500, increasing earning potential compared to a standard S&P 500 ETF that delivers returns in line with the index. However, they differ significantly in terms of their risk and reward profiles.

SPXL aims for triple the daily returns of the S&P 500, while SSO targets double the daily returns. This gives SPXL more potential for lucrative earnings, but it also carries much more risk.

Leveraged ETFs function best as very short-term investments. Typically, investors only hold them for a single trading day, or a few days at most. Because both funds reset their leverage daily, longer holds can substantially increase volatility.

If the S&P 500 is performing particularly well while you’re holding one of these ETFs, SPXL could maximize those earnings with its 3x daily leverage. But if the index performs poorly, you could see much steeper drawdowns with SPXL than you would with SSO.

When choosing between these two ETFs, the deciding factor will likely be how much risk you’re comfortable taking. If you’re willing to take a big swing in hopes of increasing your earning potential, SPXL could be the more lucrative of the two. For those looking to limit risk with a leveraged ETF, SSO could be the better option.