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5 Best Inverse/Leveraged ETF Areas of Last Week

Wall Street was muted last week with the S&P 500 gaining 0.02% but the Dow Jones (down 0.5%), the Nasdaq Composite (down 0.4%) and the Russell 2000 (down 0.2%) showing a downtrend. President Biden is reportedly on the way to hike the capital gain tax rate in the near term.

This probably gave way to some profit-booking while reflationary cues increased benchmark U.S. treasury bond yields last week from 1.58% (at the start of week) to 1.65% (at the end of the week). Overall, earnings came in upbeat with the big tech earnings overwhelming investors completely.

Against this backdrop, below we highlight a few leveraged ETFs of the last week.

Inverse Gold Miners

Gold prices remained subdued last week thanks to the spike in the bond yields and the resultant strength in the greenback. Upbeat U.S. economic growth reading of the first quarter also added to the dollar strength. As a result, gold mining stocks nosedived and inverse gold mining ETFs gained. Microsectors Gold Miners -3X ETN GDXD (up 14.8%) and Gold Miners Bear 2X Direxion DUST (up 9.7%) were among the winners.

Big Banks

Bank stocks held up well last week as strong household savings in Q1 ruled the fear for delinquencies or default on loans in the banking sector. Rising rates also helped bank stocks last week. In any case, banking is an undervalued sector currently. Earnings have been upbeat in the sector. A prospective rising rate environment is another plus for the banking stocks. Microsectors 3X U.S. Big Banks ETN BNKU added 9% last week (read: ETF Areas to Win on Smashing Q1 U.S. GDP Growth).

S&P 500

Upbeat data points, strong consumer savings and promising corporate earnings acted as a tailwind for the high-beta stocks. S&P 500 High Beta Bull 3X Direxion HIBL, which selects 100 securities from the S&P 500 Index that have the highest sensitivity to beta over the past 12 months, gained 7.9% last week.

Natural Gas

Natural gas prices rose on warm weather forecast that increased the demand for cooling. According to the National Oceanic Atmospheric Administration, warmer-than-normal weather is expected to hit most of the United States in the coming days. With supply being flat and demand rising, natural gas prices gained. Ultra DJ-UBS Natural Gas Proshares BOIL added 7.6% last week.

Inverse Semiconductor

Semiconductor stocks were out of favor last week despite the ongoing chip shortage. The underlying PHLX Semiconductor Sector Index of the fund SOXS measures the performance of the semiconductor sub-sector of the U.S. equity market. Hence, Semiconductor Bear 3X Direxion SOXS, which gives three times inverse exposure to the said index, gained 7.6% last week.

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PRO-ULT BB NG (BOIL): ETF Research Reports
 
DIR-D GM BR 3X (DUST): ETF Research Reports
 
DIR-D SM BR 3X (SOXS): ETF Research Reports
 
MCRO-US BB I3XL (BNKU): ETF Research Reports
 
DIR-D SP5HB BL3 (HIBL): ETF Research Reports
 
MRCO-GM 3X INV (GDXD): ETF Research Reports
 
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Zacks Investment Research
 
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