Last July, I wrote “To Leverage or Not to Leverage: A Primer for Canadian Investors” and broke leveraged ETFs into two camps.
The first group is your typical 2x or 3x daily reset product that uses swaps to juice performance over one trading day. These are trading tools. You don’t buy and hold them unless you enjoy tracking error and a wild ride.
The second group is different. These funds offer modest leverage (1.25x) and are borrowed internally using margin loans. They don’t reset daily, and they’re built to be held over longer periods if you’re okay with more volatility and slightly higher fees from the cost of borrowing.
Since then, Canadian ETF issuers have leaned into the second category, launching a bunch of internally levered products. But most of them I wouldn’t touch.
I’m not interested in sector-specific levered ETFs, and definitely not single-stock versions. If you’re going to add leverage, you want diversification working in your favor to improve the risk-reward trade-off.
That narrows it down to two that I actually like, one from Global X ETFs and one from Hamilton ETFs. These are the only buy-and-hold leveraged ETFs in Canada that I think are worth a second look.
Global X Enhanced All-Equity Asset Allocation ETF (HEQL)
Global X Enhanced All-Equity Asset Allocation ETF CAD (TSX:) is what happens when you take a standard Canadian all-equity asset allocation ETF and just add more of it. Specifically, it holds 125% of the Global X All-Equity ETF (HEQT). There’s no daily reset, no swap structure, no exotic mechanics.
It’s the same idea as buying HEQT on margin in a taxable account, except this version gets institutional borrowing rates and can be held in a Tax-Free Savings Account or Registered Retirement Savings Plan.
HEQT is already one of the better all-equity asset allocation ETFs in Canada. It only gives Canada a 20% weight, unlike others that push closer to 30 or even 40. The rest is split across 35% , 25% developed international via the EAFE index, 8% in emerging markets, 7% to the , and 4% in small caps through the .
That’s real diversification. HEQL just takes that mix and cranks it up by 25%. Again, you could technically replicate this with your own leverage, but you’d have to do it in a margin account, and you’d likely pay more in interest. HEQL gets access to lower institutional financing costs and handles all the rebalancing for you. All you need to do is click buy.
The headline fee looks steep. The base management fee is 0.45%, but the total management expense ratio comes out to 1.84%. That includes the cost of borrowing the extra 25% of the portfolio. There’s also a 0.15% trading expense ratio. Margin isn’t free. This is the price of embedded leverage done cleanly and accessibly. Funny enough, its still cheaper than some mutual funds.
One extra plus: HEQL pays a monthly distribution of 1.8%. It’s not a yield chaser’s dream, but it beats the typical quarterly or annual schedule and adds a little consistency to the income stream.
Hamilton Enhanced Mixed Asset ETF (MIX)
Modern portfolio theory says that if you build a diversified mix of uncorrelated assets, you can add leverage to improve returns without necessarily taking on more risk. Hamilton Enhanced Mixed Asset ETF (TSX:) takes that theory and puts it into practice using three core building blocks: stocks, bonds, and gold.
The base portfolio is simple. It holds 60% in the S&P 500, 20% in long-term U.S. Treasurys, and 20% in . All of this is done through low-cost, liquid ETFs.
What matters more than the holdings is how they interact. Stocks do well when the economy is strong. Long-term bonds rally when inflation falls or growth slows. Gold tends to shine when real rates drop or geopolitical risks rise.
These three exposures are driven by different forces and have historically had low correlation with each other. That makes them ideal candidates for a risk-balanced portfolio.
MIX then applies 1.25x leverage across the entire portfolio, bringing the effective exposures to 75% S&P 500, 25% Treasurys, and 25% gold. The portfolio is rebalanced automatically whenever any asset class drifts more than 2% from its target weight.
Despite the lack of international diversification, I actually prefer MIX over HEQL. Developed and emerging markets are often highly correlated with U.S. equities, especially during global selloffs. Treasurys and gold, on the other hand, tend to behave very differently. As counterweights to U.S. stocks, they’ve proven far more reliable during stress events.
There’s no management fee on MIX until April 30, 2026. After that, the fee kicks in at 0.35%. The ETF is still new, so the official MER hasn’t been published, but I’d expect it to land somewhere near HEQL given the similar leverage setup.