TNA vs URTY: Weighing Two 3x Daily Leveraged Small-Cap ETFs

Key Takeaways

• Both TNA and URTY are 3x daily leveraged exchange-traded funds (ETFs) that seek 300% of the daily return of the Russell 2000 Index, making them direct competitors targeting identical small-cap exposure.
• The two funds differ in construction: TNA builds its leverage largely through the iShares Russell 2000 ETF (IWM) and swap agreements, while URTY combines swaps, index futures, and direct positions in underlying small-cap stocks.
• URTY carries a lower expense ratio of 0.95% versus TNA's 1.05%, a meaningful structural cost advantage for a product that resets leverage daily.
• TNA holds a substantially larger asset base and higher average daily trading volume, giving it a liquidity edge for active traders.
• Both funds are non-diversified and use daily rebalancing, which creates compounding (or "decay") risk that makes them unsuitable as buy-and-hold vehicles.
• Tickeron AI Verdict: URTY, based on lower cost, more direct index replication, and comparable trend consistency, though TNA retains superior liquidity.

Why These Two Leveraged ETFs Draw Attention

Investors looking for amplified exposure to U.S. small-cap equities often compare two closely related products: the Direxion Daily Small Cap Bull 3X Shares and the ProShares UltraPro Russell2000. Both aim to deliver about three times the daily movement of the Russell 2000 Index, which tracks roughly 2,000 smaller U.S. companies. Since they compete for the same short-term trading capital, decisions between them usually hinge on cost, how they replicate the index, and liquidity rather than the underlying benchmark itself. This comparison reviews their sector exposures, performance behavior, and positioning in the current environment.

A Closer Look at TNA

Launched in November 2008, TNA is a passively managed, non-diversified leveraged ETF seeking daily results, before fees and expenses, equal to 300% of the Russell 2000 Index. It reaches this leverage by placing at least 80% of its net assets in financial instruments, primarily a sizable stake in the iShares Russell 2000 ETF (IWM) along with Russell 2000 index swaps and cash equivalents. Its net expense ratio stands at 1.05%. Sector weights reflect the benchmark, with financials, healthcare, industrials, and information technology each taking a notable portion, plus smaller allocations to consumer discretionary, real estate, and energy. As one of the larger and older small-cap leveraged ETFs, TNA provides strong liquidity and sees frequent use in short-term tactical trades. I also checked this using Tickeron’s AI Screener to see how the fund compares to others in the leveraged ETF space.

A Closer Look at URTY

Incepted in February 2010, URTY is a passively managed, non-diversified leveraged ETF that likewise targets 300% of the daily return of the Russell 2000 Index. Instead of focusing on one underlying ETF, URTY builds exposure through a mix of Russell 2000 index swaps, futures contracts, direct holdings in individual small-cap stocks, and a money market fund such as the ProShares GENIUS Money Market ETF (IQMM). Its net expense ratio is 0.95%, about ten basis points below TNA. Sector exposure tracks the Russell 2000, led by financials, technology, healthcare, and industrials. The fund lists many underlying positions, yet its overall assets and average trading volume remain smaller than TNA’s, resulting in comparatively lighter liquidity.

The Small-Cap Market Backdrop

Both ETFs ultimately reflect the same theme: the direction of U.S. small-cap equities. Small-cap results tend to track domestic economic growth, interest-rate expectations, and credit conditions, as smaller companies often carry more floating-rate debt and generate a larger share of revenue inside the U.S. than large multinationals. Recent cycles have shown pronounced rotation between small- and large-cap segments driven by shifts in Federal Reserve policy, regional bank lending, and consumer spending durability. The Russell 2000’s heavy weighting in financials, industrials, and healthcare also leaves these funds sensitive to earnings trends in those areas. Regulatory and capital-markets changes affecting small-cap financing stay an ongoing risk factor for both products.

Performance and Positioning Side by Side

Because both funds track the same index at the same leverage level, their directional returns have stayed closely aligned over recent periods. The main differences in results stem from fees and replication efficiency. URTY’s lower expense ratio offers a modest structural advantage that compounds over time, while TNA’s greater scale and tighter spreads can help reduce costs for high-frequency traders. In volatile or choppy markets, both remain exposed to leveraged decay, so multi-day returns can diverge noticeably from three times the index’s cumulative move. Positioning therefore depends more on cost sensitivity, execution needs, and holding period than on index choice itself. From what I see, the structural details matter most here.

Using AI Tools in ETF Research

In my own analysis process, I often turn to Tickeron’s AI Screener to quickly filter leveraged ETFs and compare their technical patterns, volatility profiles, and performance metrics against peers. This helps surface ideas and confirm how funds like these stack up on cost and liquidity without manual effort across thousands of securities.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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