SOXL vs. SPXL: These Leveraged ETFs Swing Big for Potentially Lucrative Returns -- but Are They Worth the Risk?

The Direxion Daily S&P 500 Bull 3X Shares (NYSEMKT:SPXL) and the Direxion Daily Semiconductor Bull 3X Shares (NYSEMKT:SOXL) are both designed for traders seeking amplified daily returns, but their underlying benchmarks result in very different risk profiles.

SPXL magnifies the S&P 500, giving broad market exposure, while SOXL focuses solely on semiconductors -- one of the most volatile corners of the technology sector. Here’s how they compare on cost, performance, risk, and what’s inside.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

SOXL offers a marginally lower expense ratio than SPXL, but both sit at the high end for exchange-traded funds. SPXL’s yield is marginally higher, but considering that both of these ETFs are short-term investments, fees and yield may not be the primary factors to consider.

Performance & risk comparison

What's inside

SOXL is a pure-play leveraged bet on the semiconductor industry, with 100% of its assets in technology stocks. It contains only 44 holdings, and its largest positions include Advanced Micro Devices, Broadcom, and Nvidia. Like SPXL, it resets its 3X leverage daily, which can significantly affect returns over longer periods due to compounding and volatility drag.

SPXL, by contrast, tracks a leveraged version of the S&P 500, spreading its risk across more than 500 stocks and several sectors -- though it's most heavily allocated toward technology, financial services, and consumer cyclicals.

Its top holdings include Nvidia, Apple, and Microsoft, but each represents a relatively small slice of total assets. Both funds’ daily leverage resets are important considerations for anyone holding positions longer than a single trading session.

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What this means for investors

Leveraged ETFs can be incredibly volatile investments, but under the right circumstances, they can also be lucrative. Both SPXL and SOXL are high-risk, high-reward ETFs, but SOXL is far riskier.

SOXL is 100% devoted to the semiconductor industry, aiming for three times the daily return of its underlying index. Sometimes that risk pays off, and sometimes it doesn't. SOXL has earned much higher returns than SPXL over the last 12 months, but it's significantly underperformed over the last five years.

Considering SOXL's higher beta and drastically steeper max drawdown, investors can expect more extreme price swings with this investment. While it can lead to higher returns, that's not always guaranteed.

SPXL is also a higher-risk investment compared to most other ETFs, but because it tracks the S&P 500, it's experienced less volatility than the semiconductor-specific SOXL.

Investors deciding between the two ETFs will have to decide how much risk is a worthwhile trade-off for higher returns. SOXL's intense price swings can be a lot to stomach, but they can also lead to substantial earnings if you invest at the right time. SPXL is more diversified and less volatile, but it may not have as much earning potential as a sector-specific fund like SOXL.

Glossary

Leveraged ETF: An exchange-traded fund using financial derivatives to amplify daily returns, often by 2x or 3x the benchmark.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges investors to cover operating costs.
Beta: A measure of an investment’s volatility compared to the overall market; higher beta means greater price swings.
Assets under management (AUM): The total market value of all assets managed by a fund.
Drawdown: The percentage decline from a fund’s highest value to its lowest point over a specific period.
Dividend yield: Annual dividends paid by a fund, expressed as a percentage of its current price.
Sector concentration: The extent to which a fund’s assets are invested in a single industry or sector.
Volatility drag: The negative impact of market fluctuations on the long-term returns of leveraged investments.
Daily leverage reset: The process by which leveraged ETFs adjust their exposure each day to maintain a set leverage ratio.
Compounding: The effect of earning returns on both the initial investment and on previously earned returns, especially relevant for leveraged funds.
Pure-play: An investment focused exclusively on a single industry or sector.

Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.