We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Leveraged ETFs With Double-Digit Gains Halfway Through Q1
Read MoreHide Full Article
Amid the tariff trade war fears, economic slowdown concerns and roaring inflation, Wall Street has been on a bull run halfway through the first quarter. The S&P 500 touched record highs on several occasions, having risen 2.2%, while the Dow Jones and the Nasdaq Composite Index gained 2.1% and 1.1%, respectively.
We have highlighted a bunch of the best-performing leveraged equity ETFs from different corners of the market that gained double digits halfway through the first quarter. These include MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) , Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB - Free Report) , Direxion Daily MSCI Emerging Markets Bull 3x Shares (EDC - Free Report) , Direxion Daily Healthcare Bull 3X Shares (CURE - Free Report) and Direxion Daily Utilities Bull 3X Shares (UTSL - Free Report) .
These funds seek to register big gains in a short span and will continue their strong trend, at least in the near term, provided the sentiments remain bullish. Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as swaps, futures contracts and other derivative instruments, to accomplish their objectives.
A combination of advancements in AI, solid corporate earnings season and lower rates are driving the rally. The rally has broadened beyond the "Magnificent Seven" to other sectors like financials and industrials this year. Though the Fed has signaled no rush to reduce interest rates further as inflation remains elevated, since September 2024, it has made a series of rate cuts, by a total of 100 bps (read: Only One Rate Cut Expected in 2025? ETFs to Play).
However, the latest economic data points to a slowdown in the economy. U.S. business activity nearly stalled in February, while consumer sentiment dropped to a 15-month low. Consumers' 12-month inflation expectations deteriorated to 4.3%, the highest reading since November 2023, from 3.3% in January. Over the next five years, consumers expect inflation to be 3.5%, the highest since 1995, compared with 3.2% in January, according to the latest survey.
Additionally, concerns are building up in the homebuilder space that tariffs would raise the cost of building materials, including lumber and appliances, thereby leading to elevated home prices and reduced affordability. Homebuilder sentiment dropped to a five-month low in February.
Further, President Donald Trump's tariff talks, which could lead to a global trade war, have been weighing on the stock market.
MicroSectors Gold Miners 3X Leveraged ETN seeks to deliver three times (3X or 300%) the performance of the S-Network MicroSectors Gold Miners Index. It has amassed $392.2 million in its asset base and charges 95 bps in annual fees. MicroSectors Gold Miners 3X Leveraged ETN trades in an average daily volume of 786,000 shares.
Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB - Free Report) – Up 52.9%
Direxion Daily CSI China Internet Index Bull 2X Shares offers twice the leveraged exposure to China’s Internet market by tracking the CSI Overseas China Internet Index. It charges an annual fee of 88 bps and trades in an average daily volume of about 751,000 shares. Direxion Daily CSI China Internet Index Bull 2X Shares has accumulated AUM of $418.6 million (read: What's Behind the Surge in Chinese Tech Stocks & ETFs?).
Direxion Daily MSCI Emerging Markets Bull 3x Shares seeks to provide three times the performance of the MSCI Emerging Markets Index. It has amassed $84.4 million in its asset base and trades in a volume of 87,000 shares. Direxion Daily MSCI Emerging Markets Bull 3x Shares charges 95 bps in annual fees.
Direxion Daily Healthcare Bull 3X Shares creates a three times leveraged long position in the Health Care Select Sector Index. It charges 91 bps in fees a year. Direxion Daily Healthcare Bull 3X Shares has $179 million in AUM and trades in volumes of 56,000 shares on average.
With AUM of $46.3 million, Direxion Daily Utilities Bull 3X Shares offers three times exposure to the performance of the Utilities Select Sector Index. It charges investors an annual fee of 95 bps and trades in a good average daily volume of 155,000 shares.
Bottom Line
As a caveat, investors should note that these products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing, when combined with leverage, may make these products deviate significantly from the expected long-term performance figures (see: all the Leveraged Equity ETFs here).
Yet, for ETF investors who are bullish on these sectors in the near term, any of the abovementioned products can be an interesting choice. A near-term long could be intriguing for those with high-risk tolerance and a belief that the trend is a friend in this corner of the investing world.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 Leveraged ETFs With Double-Digit Gains Halfway Through Q1
Amid the tariff trade war fears, economic slowdown concerns and roaring inflation, Wall Street has been on a bull run halfway through the first quarter. The S&P 500 touched record highs on several occasions, having risen 2.2%, while the Dow Jones and the Nasdaq Composite Index gained 2.1% and 1.1%, respectively.
We have highlighted a bunch of the best-performing leveraged equity ETFs from different corners of the market that gained double digits halfway through the first quarter. These include MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) , Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB - Free Report) , Direxion Daily MSCI Emerging Markets Bull 3x Shares (EDC - Free Report) , Direxion Daily Healthcare Bull 3X Shares (CURE - Free Report) and Direxion Daily Utilities Bull 3X Shares (UTSL - Free Report) .
These funds seek to register big gains in a short span and will continue their strong trend, at least in the near term, provided the sentiments remain bullish. Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as swaps, futures contracts and other derivative instruments, to accomplish their objectives.
A combination of advancements in AI, solid corporate earnings season and lower rates are driving the rally. The rally has broadened beyond the "Magnificent Seven" to other sectors like financials and industrials this year. Though the Fed has signaled no rush to reduce interest rates further as inflation remains elevated, since September 2024, it has made a series of rate cuts, by a total of 100 bps (read: Only One Rate Cut Expected in 2025? ETFs to Play).
However, the latest economic data points to a slowdown in the economy. U.S. business activity nearly stalled in February, while consumer sentiment dropped to a 15-month low. Consumers' 12-month inflation expectations deteriorated to 4.3%, the highest reading since November 2023, from 3.3% in January. Over the next five years, consumers expect inflation to be 3.5%, the highest since 1995, compared with 3.2% in January, according to the latest survey.
Additionally, concerns are building up in the homebuilder space that tariffs would raise the cost of building materials, including lumber and appliances, thereby leading to elevated home prices and reduced affordability. Homebuilder sentiment dropped to a five-month low in February.
Further, President Donald Trump's tariff talks, which could lead to a global trade war, have been weighing on the stock market.
Leveraged ETFs in Focus
MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) – Up 60.6%
MicroSectors Gold Miners 3X Leveraged ETN seeks to deliver three times (3X or 300%) the performance of the S-Network MicroSectors Gold Miners Index. It has amassed $392.2 million in its asset base and charges 95 bps in annual fees. MicroSectors Gold Miners 3X Leveraged ETN trades in an average daily volume of 786,000 shares.
Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB - Free Report) – Up 52.9%
Direxion Daily CSI China Internet Index Bull 2X Shares offers twice the leveraged exposure to China’s Internet market by tracking the CSI Overseas China Internet Index. It charges an annual fee of 88 bps and trades in an average daily volume of about 751,000 shares. Direxion Daily CSI China Internet Index Bull 2X Shares has accumulated AUM of $418.6 million (read: What's Behind the Surge in Chinese Tech Stocks & ETFs?).
Direxion Daily MSCI Emerging Markets Bull 3x Shares (EDC - Free Report) – Up 20.5%
Direxion Daily MSCI Emerging Markets Bull 3x Shares seeks to provide three times the performance of the MSCI Emerging Markets Index. It has amassed $84.4 million in its asset base and trades in a volume of 87,000 shares. Direxion Daily MSCI Emerging Markets Bull 3x Shares charges 95 bps in annual fees.
Direxion Daily Healthcare Bull 3X Shares (CURE - Free Report) – Up 17.5%
Direxion Daily Healthcare Bull 3X Shares creates a three times leveraged long position in the Health Care Select Sector Index. It charges 91 bps in fees a year. Direxion Daily Healthcare Bull 3X Shares has $179 million in AUM and trades in volumes of 56,000 shares on average.
Direxion Daily Utilities Bull 3X Shares (UTSL - Free Report) – Up 15.4%
With AUM of $46.3 million, Direxion Daily Utilities Bull 3X Shares offers three times exposure to the performance of the Utilities Select Sector Index. It charges investors an annual fee of 95 bps and trades in a good average daily volume of 155,000 shares.
Bottom Line
As a caveat, investors should note that these products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing, when combined with leverage, may make these products deviate significantly from the expected long-term performance figures (see: all the Leveraged Equity ETFs here).
Yet, for ETF investors who are bullish on these sectors in the near term, any of the abovementioned products can be an interesting choice. A near-term long could be intriguing for those with high-risk tolerance and a belief that the trend is a friend in this corner of the investing world.