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Top Leveraged ETFs of Last Week

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The last week was moderate for Wall Street with the S&P 500 gaining about 0.2%, the Dow Jones retreating about 0.8% but the Nasdaq adding about 1.7%. The reason behind the weakness in the market was the rise in coronavirus cases.

With the surge in coronavirus cases menacing U.S. recovery, Federal Reserve Vice Chairman Richard Clarida recently indicated that the U.S. central bank can extent the level of support, even if a double-dip recession is not the base case scenario, per a Reuters article (read: Buy Growth ETFs on Endless Fed Support).

Against this backdrop, below we highlight a few leverage ETF areas that topped last week.

FANG+ & Communications

The tech and communication sector is a coronavirus winner. Social distancing triggered by the coronavirus outbreak has benefited communications and activities over Internet in recent months. Top mutual funds continue to invest heavily in the tech sector, per Investor’s Business Daily.  Amazon.com (AMZN - Free Report) led all FANG stocks.

Last week, Nasdaq hit multiple record highs. Amazon’s share price surpassed the $3000-mark for the first time ever. Along with Amazon, many other tech stocks, especially those which are beneficiaries of the pandemic, hit a record high.

MicroSectors FANG+ Index 3X Leveraged ETN (FNGU - Free Report) (up 37.9%) and MicroSectors FANG+ Index 2X Leveraged ETN (FNGO - Free Report) (up 24.8%) gained the most in this segment. Direxion Daily Communication Services Index Bull 3X Shares ) (up 14.2%) also gained considerably last week.

China

Chinese equity markets delivered the best daily performance in five years in recent days. Upbeat manufacturing data, central bank policy easings and the booming tech sector have been aiding the rally. China A Share Bull 2X ETF (CHAU - Free Report) (up 21.3%), Direxion Daily FTSE China Bull (YINN - Free Report) (up 20.8%) and China Internet Index Bull 2X ETF (CWEB - Free Report) (up 17.1%) are the winning ETFs in this segment.

Chinese versions of stay-at-home stocks ranging from e-commerce, search engines, providers of IT services and educational content have been special winners amid the pandemic (read: 6 China ETFs From 3 Sectors That Emerged Winners in June).

Gold

Gold bullion and mining stock prices have been steady amid the pandemic as demand for this safe-haven asset remained strong. Lower interest rates across economies, a dovish Fed and the latest moderation in the price of the greenback have also been aiding the metal price.

Low oil prices are another plus. Mining companies’ 50% production costs are closely linked to energy prices. Chances of a decline in oil prices amid poor refiners’ margins and coronavirus-led demand disruptions have been weighing on oil prices. Overall, DB Gold Double Long ETN (DGP) (up 20.7%) and Junior Gold Miners Index Bull 2X ETF (JNUG - Free Report) (up 16.1%) were the winners (read: Buy ETFs & Stocks from Top-Ranked Gold Mining Industry).

Nasdaq-100

The index is tech heavy, which is why it is rallying hard in recent sessions. The tech sector is one of the beneficiaries of the coronavirus outbreak and the resultant lockdowns. As a result, the Nasdaq 100 hit all-time highs last week. This, in turn, has benefited ProShares UltraPro QQQ (TQQQ - Free Report) (up 14.4%) a lot.

Emerging Markets

Emerging Markets Bull 3X ETF (EDC - Free Report) added 13.3% past week. Since interest rates at developing economies are now at extremely low levels, many investors are moving toward emerging market investing in search of higher yields. The underlying index of the fund is the MSCI Emerging Markets Index. Chinese equities hold the spot in the index with about 33%, followed by 13% in Korea and 11.35% in Taiwan.

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