Exchange-traded funds (ETFs) are popular among day traders because you can buy and sell them whenever the markets are open throughout the day. This differentiates them from mutual and index funds, which can only be traded once a day.
The ability to trade ETFs on a minute-by-minute basis can lead to big returns — and big losses.
ETFs carry certain risks that apply to some investors more than others. Even putting your money into the 10 best-performing ETFs could be an investing mistake. To find out why, keep reading.
CNBC recently conducted an analysis of top-performing ETFs and found the following 10 had the highest returns last year:
|
MicroSectors Gold Miners 3X Leveraged ETN |
GDXU |
+796% |
|
Direxion Daily MU Bull 2X Shares |
MUU |
+558% |
|
GraniteShares 2x Long MU Daily ETF |
MULL |
+556% |
|
Direxion Daily Junior Gold Miners Index Bull 2X Shares |
JNUG |
+466% |
|
BetaPro Canadian Gold Miners 2x Daily Bull ETF |
GDXU |
+432% |
|
Direxion MSCI Daily South Korea Bull 3X Shares |
KORU |
+426% |
|
Direxion Daily Gold Miners Index Bull 2x Shares |
NUGT |
+423% |
|
ProShares Ultra Silver |
AGQ |
+361% |
|
BetaPro Silver 2X Daily Bull ETF |
SLVU |
+349% |
|
WisdomTree Efficient Gold Plus Gold Miners Strategy Fund |
GDMN |
+226% |
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those are eye-popping returns, even in the context of a strong year on Wall Street. In contrast, the S&P 500 gained about 16.4% in 2025, according to Macrotrends.
So why would investing in the best-performing ETFs be a mistake?
It’s mainly due to the vast majority of investors having little expertise in the kind of narrow, niche-oriented ETFs that often produce the highest returns, according to Jeff Ptak, managing director for Morningstar Research Services.
“They should play very little, if any, role in your portfolio,” Plak told CNBC. “Most of what you see at the top of these lists is niche, hyper-volatile, gimmicky. These aren’t words I would associate with prudent, long-term investing.”
Another problem is \many top performers aim to produce massive returns every day, which carries the kind of risk and volatility most investors are ill-suited for.
“These are basically used as short-term trading instruments. They’re intended to be held for one day,” Roxanna Islam, head of sector and industry research at TMX VettaFi, told CNBC. “They’re not something to hold for a whole year, even though you see a high [2025] return.”
According to a blog post from Charles Schwab, ETFs are best for active daily traders who want a tax-efficient asset that also provides niche exposure. If you don’t check those boxes, then you’re probably better off investing in mutual funds or index funds.
