Wall Street was upbeat last week with the S&P 500, the Dow Jones and the Nasdaq gaining about 3.3%, 2.6% and 3.4%, respectively. The S&P 500 and the Nasdaq repeatedly hit record closing last week. On Aug 27, the Federal Reserve announced a new strategy to bring back the United States to full employment level and drive inflation back to healthier levels.
This raised anticipation that rates will remain lower for a longer time and in turn charged up the equity market. Positive developments on the vaccine and treatment fronts were added positives. Against this backdrop, let’s take a look at the top-performing leveraged ETFs of last week.
Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL - Free Report) – Up 17.8%
The underlying S&P 500 High Beta Index selects 100 securities to include in the Index from the S&P 500 Index that have the highest sensitivity to beta over the past 12 months. The fund charges 98 bps in fees. Upbeat market sentiments drove high beta stocks last week.
MicroSectors FANG+ Index 3X Leveraged ETN (FNGU - Free Report) – Up 16.8%
The underlying NYSE FANG+ index includes 10 highly liquid stocks that represent a segment of the technology and consumer discretionary sectors consisting of highly-traded growth stocks of technology and tech-enabled companies.
The product was a major beneficiary of a rally in the Nasdaq and the FAANG stocks. Notably, Facebook (FB) reached to new milestone last week. The social media giant surpassed $300 per share for the first time by climbing 8.2% in the Aug 26 trading session (read: S&P 500, Nasdaq at New Highs: 5 Top Leveraged ETFs at Mid Q3).
Direxion Daily Dow Jones Internet Bull 3X Shares (WEBL - Free Report) – Up 14.8%
The underlying Dow Jones Internet Composite Index includes only companies whose primary focus is Internet-related. The fund charges 98 bps in fees. This product is also a beneficiary of the Nasdaq rally and a jump in internet stocks.
MicroSectors U.S. Big Banks Index 3X Leveraged ETN (BNKU - Free Report) – Up 14.6%
The Fed’s decision to not control the yield curve and pledges to boost inflation in the United States have steepened the yield curve, which in turn benefited banking stocks. The benchmark 10-year U.S. treasury yield gained by five bps to 0.74% on Aug 27 from a day earlier. The yield on two-year treasuries was steady at 0.16%. Overall, the yield curve slightly steepened on Aug 27. Since banks borrow money at short-term rates and lend capital at long-term rates, steepening of the yield curve bodes well for bank ETFs.
Direxion Daily Communication Services Index Bull 3X Shares (TAWK - Free Report) – Up 14.0%
The underlying Communication Services Select Sector Index includes domestic companies from the communication services sector, which includes the following industries: diversified telecommunications services, wireless communication services, media, entertainment, and interactive media and services.
Communication services stocks too fared well in the past week. Notably, global rich communication services (RCS) market is expected to expand with a CAGR of 20.2% over the forecast period from 2020-2026. The coronavirus outbreak and the resultant stay-at-home trend made the case for the communication stocks investing more lucrative.
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