High-risk leveraged exchange-traded funds (ETFs) experienced a historic $25.7 billion loss last week as escalating trade tensions fueled market volatility. This massive outflow marked the worst single trading session for these instruments and sent shockwaves through retail investors, according to recent reports by the Financial Times. 
The drop is attributed to increased tariffs implemented under the Trump administration, leading to a selloff across both traditional and digital markets. These include broad-ranging “reciprocal” tariffs on Chinese goods, which raise concerns of a prolonged economic slump. 
Leveraged ETFs, known for their potential to amplify returns but also carry significant risk, have become popular among retail investors seeking high profits. However, they suffered heavily during the recent market turbulence. 
Analysts warn that their use demands expertise and caution, emphasizing their suitability only for specific investment strategies.