The sense of vindication didn’t last long.
After sinking nearly $2 billion into a triple-levered semiconductor fund last week, retail investors are enduring a volatile ride as the Nasdaq 100 swings between gains and losses.
The fund, known as SOXL, rose as much as 9% Monday on news that President Donald Trump’s administration exempted smartphones, computers and other electronics from its so-called reciprocal tariffs. It then fell amid a broad retreat in risk assets, only to go up again.
Traders who shoveled nearly $2.3 billion into a levered Nasdaq 100 fund with the ticker TQQQ are also on a roller-caster ride after the fund surged 7%, but later gave up some of those gains. And amid Trump’s threats to impose sector-based tariffs soon, the volatility is showing no sign of letting up.
“These ETFs allows are very popular because they help investors to get back into the market quickly and aggressively. A lot of them are worried that we’ll get another big V-shaped recovery,” said Matt Maley, chief market strategist at Miller Tabak + Co.
High-octane funds, as well as those tracking major indexes, have seen signs of dip-buying, with the largest ETF tracking the Nasdaq — ticker QQQ — raking in $3.7 billion last week, according to data compiled by Bloomberg.
Despite the historic market turmoil, many retail investors “remain committed to dip buying despite negative news flow,” analysts at Bloomberg Intelligence said in a recent note. In fact, leveraged-long ETFs absorbed more than $6.5 billion during the past week, a record and about 20 times their average over the past year, BI data show.
Low-fee ETFs have also seen inflows, with the likes of VOO — the $580 billion Vanguard S&P 500 ETF behemoth — gaining more than $11 billion last week. Meanwhile, ITOT, the iShares Core S&P Total US Stock Market ETF, saw a more-than $2 billion haul during that stretch, the most on record.
SOXL ended up notching its best week since September through Friday after Trump announced a 90-day pause for some of the tariffs. Given the eye-popping returns generated by some of the funds, it’s possible that the market continues to see even more dip buying, said Eric Balchunas, an analyst at BI.
“Catching a 50% return on a SOXL is like catching a marlin,” Balchunas said. “You’re definitely going fishing again.”
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