Best-Performing Leveraged ETF Areas of February

Wall Street has underperformed over the past month, with the S&P 500 losing 0.9% (as of Feb. 27, 2026), the Dow Jones slipping 1.3% and the Nasdaq Composite falling 3.4%. However, the small-cap index Russell 2000 has fared somewhat better with a gain of 0.7% in the same period.

Inside the AI Scare

Artificial intelligence (AI) emerged as a growing source of market panic in February, with investors increasingly questioning the long-term viability of labor-intensive business models. Recent releases from AI startups have intensified these concerns by introducing tools capable of automating tasks in legal, marketing, finance and research functions.

Adding to investor unease, AI startup Anthropic said in a blog post on Feb. 23, 2026, that its Claude Code tool can modernize COBOL, a legacy programming language widely used on IBM systems. No wonder IBM shares were badly hit in the month. IBM stock has declined 23.7% over the past month (as of Feb. 27, 2028) (read: AI Scare Back in the Market: ETFs That Stayed Steady).

Geopolitical Tensions

February can be highlighted by the heightened U.S.-Iran tensions. U.S. Vice President JD Vance said in mid-February that Iran failed to meet key American demands during the recent nuclear negotiations and warned that military action remains an option if diplomacy breaks down, as quoted on CNBC. 

Meanwhile, Iran conducted military exercises in the Strait of Hormuz — a critical route for global energy shipments — raising fears that oil flows could be disrupted in the event of conflict (read: Oil Prices Surge on Rising U.S.-Iran Tensions: ETFs to Gain/Lose).

On Feb. 28, 2026, the United States and Israel struck Iran in what President Trump said was intended to destroy the country's nuclear program and end the current regime’s power. The move led to immediate retaliation and may cause a larger-scale conflict that may pose threat to the oil markets, as quoted on Yahoo Finance.

The Supreme Leader of Iran, Ayatollah Ali Khamenei, was killed during the strikes, according to the early reports from Reuters, Axios and CNN citing sources within the U.S. government, as mentioned on the same Yahoo Finance article.

AI Behemoth NVIDIA Earnings

NVIDIA NVDA comfortably beat analysts’ expectations on both revenues and earnings. The company’s first-quarter fiscal 2027 guidance beat analysts’ expectations.Small investors jumped to buy NVIDIA on Feb. 27, 2026, following the chipmaker’s latest earnings report, according to VandaTrack, as quoted on CNBC.

Small traders recorded their highest levels of net buying in the stock during the first 80 minutes of a trading day, going back to at least 2012, according to analyst Viraj Patel, as mentioned in the same CNBC article.

ETF Winners of the Month

Against this backdrop, below we highlight a few winning leveraged exchange-traded funds (ETFs) of the past month (as of Feb. 27, 2026).

Direxion MSCI Daily South Korea Bull 3X Shares (KORU) – Up 96.47%

South Korea ETFs are emerging as quiet beneficiaries of the global AI boom, driven by strong semiconductor demand and rising export momentum. Gains were supported by chip giants Samsung Electronics and SK Hynix (read: South Korea ETFs: Quiet AI Winners).

MicroSectors U.S. Big Oil 3 Leveraged ETN (NRGU) – Up 34.6%

Rising geopolitical tensions lifted oil prices, which boosted energy ETFs. United States Oil Fund LP USO has added 8.8% over the past month. U.S. strikes in Iran could see oil prices jump $10 to $20 or more with no de-escalation, per Jorge León, head of geopolitical analysis at Rystad Energy, as quoted on Yahoo Finance (read: Oil Prices Surge on Rising U.S.-Iran Tensions: ETFs to Gain/Lose).

Direxion Daily Utilities Bull 3X Shares (UTSL) – Up 34%

Utilities ETFs have been in demand lately, thanks to the massive energy demand to fuel the data centers’ needs. Moreover, the risk-off trade sentiments benefited this apparent safe sector.

Direxion Daily Industrials Bull 3X Shares (DUSL) – Up 22.5%          

The industrials sector is yet another sector that has been performing decently at present. State Street Industrial Select Sector SPDR ETF XLI, too, has gained 5.7% over the past month, outperforming the broader market.

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This article originally published on Zacks Investment Research (zacks.com).

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