Recent regulatory disclosures show that a number of prominent U.S. wealth management firms made substantial increases to their positions in leveraged exchange-traded funds tracking the Nasdaq-100 Index in the final quarter of 2025. The moves, which amplified exposure to technology stocks, have been tested by a significant market downturn in the first quarter of 2026.
Filing Details Reveal Aggressive Positioning
According to Securities and Exchange Commission Form 13F filings made public in late March, Sherman Wealth Management acquired 42,668 shares of the ProShares UltraPro QQQ fund, known by its ticker TQQQ. This position was valued at approximately $2.25 million based on year-end pricing. Separately, Wealth Enhancement Advisory Services more than doubled its stake, reporting a holding of 135,309 shares of TQQQ worth about $7.44 million. Of that total, 68,013 shares were added during the fourth quarter.
Woodward Diversified Capital also increased its leveraged bet, focusing on the ProShares Ultra QQQ fund (QLD), which seeks double the daily return of the Nasdaq-100. Its filing showed a holding of 26,519 shares of QLD, valued at nearly $1.87 million as of December 31. Data indicates this represented an increase of nearly 128% compared to the prior quarter's position.
Market Context Turns Sour
The timing of these disclosures is notable given subsequent market movements. The Nasdaq Composite Index has declined more than 10% from its peak in October 2025, a threshold that officially marks a technical correction. The downturn accelerated in March, with the index falling 0.73% on a single trading day, exacerbating losses for leveraged products.
Leveraged ETFs like TQQQ and QLD are designed to deliver multiples of the daily performance of their underlying index. TQQQ targets triple the daily move of the Nasdaq-100, while QLD aims for double. However, these funds reset their leverage daily, a mechanism that can cause returns over longer periods to deviate significantly—sometimes wildly—from the simple multiple of the index's performance, especially in volatile markets. ProShares, the issuer of both funds, includes explicit warnings to this effect for investors.
Analysts Weigh In on the Pressure
The market decline has created a challenging environment for these high-octane bets. "Everything is getting hit in this environment, and tech is no exception," noted Angelo Kourkafas, an investment strategist at Edward Jones. Matt Orton, a portfolio manager at Raymond James, described the situation as a "perfect storm" for the megacap technology sector, which dominates the Nasdaq-100.
Despite the recent stress, some see potential opportunity. Chris Galipeau of Franklin Templeton suggested that "the risk-reward is improving" for the tech sector. He pointed to valuation compression, noting that the sector's forward price-to-earnings ratio has retreated to around 20, down from 32 at the end of October 2025.
Broader Trend in Leveraged Products
The appetite for leveraged ETFs extends beyond these specific funds and issuers. Firms like Direxion and GraniteShares continue to develop and market similar products. "Interest in trading the volatility in markets has grown," said Mo Sparks, a managing director at Direxion. This trend persists even as the SEC in December temporarily halted reviews of new funds seeking to offer leverage above 2x, in order to evaluate associated risks.
Some industry observers express concern over the proliferation of these instruments. Bryan Armour, director of passive strategies research for North America at Morningstar, characterized the growing use of leveraged ETFs as a sign of "growing reliance on speculation" among certain market participants.
Data Limitations and Forward Look
It is crucial to note that the disclosed holdings are a snapshot as of December 31, 2025. SEC rules allow a 45-day delay for filing Form 13Fs, meaning the data released in late March does not reflect any portfolio adjustments managers may have made during the first-quarter market turbulence. The true current exposure of these wealth advisers remains unknown.
Investors seeking clarity will need to wait for first-quarter 13F reports, which fund managers have 45 days after March 31 to file. For now, the filings provide clear evidence that as 2025 concluded, several professional money managers were willing to maintain and even increase substantial leveraged bets on the high-flying Nasdaq-100, just before a sharp reversal tested their convictions.
