Leveraged ETF Bloodbath: Record Closures Amid Record Launches

The leveraged ETF market in 2026 is experiencing unprecedented growth and contraction. A record number of new funds are launching, but at least 20 have shut down so far this year, with ten closing effective April 10.

Direxion pulled the plug on its two crypto-adjacent products, LMBO and REKT. Despite LMBO's 34% gain before closure, it was the lack of assets under management that led to its demise. The corresponding bear fund, REKT, fared worse, falling over 31%.

Newer, smaller funds are concentrated among the closures, while established products like MSTX, MSTU, and CONL continue to trade despite market turbulence. Bloomberg's Eric Balchunas notes that these closures are a necessary correction rather than evidence of investor disinterest in leveraged strategies.

Issuers are launching new products at a record pace, with many failing to attract sufficient interest. Liquidity and assets under management should be key considerations for investors choosing leveraged ETFs. A fund's performance is not the only factor determining its survival.