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6 Leveraged ETF Areas Up At Least 20% Last Week

After a volatile January, Wall Street started February on a strong footing.The S&P 500, the Dow Jones and the Nasdaq Composite added about 3%, 3.1% and 3.4%, respectively, past week (as of Feb 5, 2021). The S&P 500 and the Nasdaq Composite Index are hovering around new highs.

Solid corporate earnings and expectations of a fat stimulus by U.S. President Joe Biden’s administration have renewed the appeal for the riskier assets. The stronger-than-expected results so far in the fourth quarter have led analysts to raise their estimates for the coming quarters (read: Ride Market Rally With High-Beta ETFs & Stocks).

Against this backdrop, below we highlight a few leveraged ETF areas that surged last week.


Tech stocks, mainly the Internet ones, have been in fine fettle. Tech companies did extremely well on the bourses as still-existing COVID-19 fears brightened the appeal for stay-at-home stocks. Earnings growth and potential for the same have also been upbeat for the space. Dow Jones Internet Bull 3X Direxion (WEBL) (up 29.6%) gained the most last week.


S&P Biotech Bull 3X Direxion (LABU) (up 28.8%) topped in this space. The fund follows the S&P Biotechnology Select Industry Index. The expense ratio of the fund is 1.04% annually. Various researches on coronavirus vaccines, neuroscience and cancer drugs have kept the appeal of the biotech space alive.            


This has been a winner of the steepening yield curve trend. The 10-year U.S. breakeven inflation rate, a proxy for annual inflation expectations, has strongly rebounded from the pandemic lows reached in March 2020 to 2.19%. Notably, the spread between the 5-year and 30-year yields have been hovering around the widest levels since February 2016. This has clearly benefited the bank stocks. Microsectors 3X U.S. Big Banks ETN (BNKU) (up 28.1%) and Regional Banks Bull 3X Direxion (DPST) (up 26.8%) were the clear winners (read: Here's Why You Should Buy Bank ETFs Now).


Earnings growth for Q4 has turned modestly positive, following three straight quarters of decline.Plus,growing launches and rollouts of vaccines and easing lockdown restrictions boosted risk-on trade sentiments. S&P 500 High Beta Bull 3X Direxion (HIBL) (up 27.2%) was thus a winner past week.


United States Oil Fund LP USO added 5.8% past year. The rally was propelled by hopes of faster economic recovery. The year 2020 was marked by oil glut thanks to an oil price war and the pandemic. Now, the situation has improved and taken a complete turn. This has lent a helping hand to Microsectors U.S. Big Oil Index 3X ETN (NRGU) (up 26.3%).

Small Caps

Solid fiscal stimulus under the Biden presidency also gave a boost to the small-cap stocks, which were mainly focused on domestic economic improvement. Ultrapro Russell 2000 Proshares (URTY) (up 24.9%) and Smallcap Bull 3X Direxion TNA (up 24.8%) were the winners here.

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United States Oil ETF (USO): ETF Research Reports
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