Two High Risk ETFs That Aren’t Leveraged, Inverse, or Single-Stock

Investor risk appetite has been redlined in 2025, and ETF issuers have delivered accordingly. Markets are now flooded with leveraged and inverse ETFs, along with single-stock ETFs that replicate just one company, and often do so in leveraged or inverse form.

Some of the most speculative stocks around, like Super Micro Computer or MicroStrategy, are now wrapped in swap-heavy ETFs that synthetically turbocharge their returns (and losses), usually with steep fees to match. This is what investors wanted, so who’s to say they’re wrong?

With these kinds of products, the risks are obvious. Many of them state outright in their prospectus that you could lose your entire investment in a single day. But what about the rest of the ETF universe? What about funds that aren’t leveraged, inverse, or single stock?

Today’s focus is on two ETFs that fall into that category but still carry significant risk, just not the kind that jumps off the page. They’re not bad investments. In fact, they’ve delivered excellent upside potential in the past and may in the future.

But based on their structure and strategy, they’re more appropriate for short-term trades than for a long-term, buy-and-hold approach. Execution matters here, and timing matters too. If that’s not your strong suit, you may want to keep these funds on your watchlist, but not in your core portfolio.

VanEck Junior Gold Miners ETF (GDXJ)

GDXJ is the delinquent little brother of the VanEck Gold Miners ETF (GDX). But before diving into what makes this ETF tick, it’s worth taking a step back and reviewing how gold mining stocks work in general.

Unlike owning physical gold, buying shares of gold miners gives you equity in a business that profits (or doesn’t) based on gold prices. These actively dig gold up, refine it, and sell it.

Because of that, their revenue and earnings tend to rise faster than the price of gold during bull markets. That’s the leverage effect: small changes in the commodity can lead to bigger changes in profits. But it works both ways. If costs rise or production falls, profits can collapse just as fast.

GDX holds large, established miners. GDXJ, on the other hand, shoots this model full of steroids. It owns small-cap companies in the exploratory or early development stages of gold mining. Translation: most of the companies in this ETF don’t make money.

Instead, they burn through cash raised via IPOs or secondary offerings to prospect and develop mining properties. It’s a high-risk, high-failure-rate game where companies live and die by access to capital. When balance sheets dry up, more dilution is almost always the next step.

That shows up in the returns. From November 2009 through August 2025, a holding period of nearly 16 years, GDXJ returned a cumulative 8.69%. That’s not per year. That’s total. On a compound basis, that works out to just 0.53% per year. And it came with a brutal ride: an 88.66% peak-to-trough drawdown and an annualized volatility of 45.25%. That’s enough to shake out even seasoned investors.

But for traders, GDXJ is an excellent vehicle. It’s far more liquid than the average junior gold miner. It’s relatively tax-efficient with a low 0.22% 30-day SEC yield. It also has listed options with tight spreads. That makes it attractive for tactical setups.

You’re trading sentiment, momentum, and macro tailwinds. And for that use case, GDXJ fits the bill. Off the top of my head, a simple 50/200-day moving average crossover could be a helpful signal here.

Virtus LifeSci Biotech Clinical Trials ETF (BBC)

You know what else bleeds cash and dilutes shareholders until a single binary event either makes or breaks the business model? Clinical-stage biotech stocks.

Unlike their commercialized counterparts (think Regeneron) that already generate revenue from approved drugs, clinical stage biotechs typically don’t earn anything outside of research grants or partnership funding. Their business model is pretty much: raise money, run trials, and pray.

The drug approval process in the U.S. usually starts with preclinical testing before moving through three clinical trial phases. Phase 1 tests basic safety in a small group. Phase 2 expands the trial to test for both safety and effectiveness. Phase 3 involves a much larger sample size to determine efficacy, monitor side effects, and compare the treatment to existing alternatives.

If all goes well, the company then submits for FDA approval. But this is the final boss level. Getting past the FDA is notoriously difficult, with most drugs failing even after years of trials and millions spent.

When you combine a basket of companies in this space using the LifeSci Biotechnology Clinical Trials Index and package it into an ETF, you get BBC. This fund equal-weights small- and micro-cap biotechs.

And no, I’m not going to pretend to understand what half these companies do. Some are probably trying to cure cancer. Others are working on rare genetic disorders. But the bottom line is they’re largely unprofitable and burning cash.

As a buy-and-hold investment, BBC has been brutal. From its inception in December 2014 through August 2025, a holding period of almost 11 years the ETF posted a cumulative loss of 11.51%. That works out to a negative 1.14% annualized return. The max drawdown was a punishing 76.85%, and annualized volatility came in at 38.74%.

That doesn’t mean there’s no money to be made. During the 2020–2021 COVID liquidity boom, interest in biotech surged as vaccines and therapeutics took center stage. But timing is everything here. And most aspiring ETF traders struggle with timing and execution.

For the majority of its life, the companies inside BBC tend to share some common traits: no revenue, dilution, unproven science, and total dependence on investor sentiment and regulatory green lights.

BBC’s strategy is not a recipe for stable long-term compounding. But if you're hunting for asymmetric trades with optionality in a hot biotech cycle, it's a name worth watching.