If your portfolio is invested in exchange-traded funds, you may have had a very good 2025. The S&P 500 — the index tracked by the three largest ETFs on the market, per ETF Database – returned about 16% in 2025.
But in theory, depending on which funds you held, you could have done quite a bit better.
The MicroSectors Gold Miners 3X Leveraged ETN, a fund which tracks the price of a privacy-focused cryptocurrency, finished the year up 796% — the best of any U.S. traded ETF, according to data from FactSet analyzed by CNBC. You could have also earned a huge return had you bought other ETFs focused on metal mining or Korean stocks.
While it can be fun to fantasize about what your returns could have looked like had you chosen one of last year’s big winners, you should think twice before choosing one as a major building block of your investing strategy, says Jeff Ptak, managing director for Morningstar Research Services.
“They should play very little, if any, role in your portfolio,” he says. “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.”
Beware of the big winners
Prudent, long-term investing is generally the name of the game if you’re hoping to build wealth, investing experts say. So what makes some of the 2025 winners unsuitable?
Leveraged funds
One common theme on the list is the use of leverage, the practice of buying or selling derivatives to amplify a fund’s return. Rather than seeking to track the return of an index, funds with 2X or 3X in the name aim to deliver multiples of that same return. This makes them highly volatile, and likely candidates for year-end best-of — or worst-of — lists, says Roxanna Islam, head of sector and industry research at TMX VettaFi, an investment research firm and index provider.
“I don’t think it’s surprising to see leverage at the top,” she says. “With two or three times [returns] they’re most likely going to be in the top at some point.”
The problem with these funds, for long-term investors, is that they aim to produce 200% to 300% of the index’s return on a daily basis, resetting for each trading day. In other words, they’re for day traders, not investors, says Islam.
“These are basically used as short-term trading instruments. They’re intended to be held for one day,” she says. “They’re not something to hold for a whole year, even though you see a high [2025] return.”
Volatile areas of the market
Another common theme among winning 2025 ETFs: precious metals mining funds.
It’s no surprise that some companies that mine for the shiny stuff did well last year. Gold prices spiked by about 65% in 2025 and silver rose by more than 140%. These firms, some of which have more well-established mining operations than others, benefit from rising precious metals prices.
While owning precious metals — often as a portfolio diversifier or an inflation hedge — is a common investment strategy, says Ptak, investing in miners is “a whole other kettle of fish.”
That’s because, in addition to fluctuations in metal prices, these firms’ stock prices move based on changes to the underlying business, which can be volatile and highly indebted, says Ptak.
“[Mining ETFs] are only slightly less speculative than something that’s got 2X or 3X in the name,” he says.
Make smarter moves
Overall, when considering adding any high-performing fund to your portfolio, you’d be wise to consider its long-term track record as well as how its objectives fit within your investment strategy, says Islam. It may be wise to do this with the help of a financial professional.
And when browsing year-end lists, remember that you’re looking for consistent, long-term returns rather than short-term wins, says Islam.
“Past performance does not equal future performance, especially when you’re looking at a lot of these smaller themes, smaller ETFs,” she says. “A lot of them don’t tend to show significant outperformance year after year, the same way holding a broad stock market ETF would.”
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