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Leveraged ETF Areas That Gained the Most on Vaccine Hopes

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Wall Street spiked on Nov 9 on news that a Pfizer (PFE - Free Report) and BioNTech (BNTX) vaccine candidate was more than 90% effective in avoiding COVID-19 in its clinical trial. The vaccine is the first to be tested in the United States to generate late-stage data. Before this, the global markets were rejoicing in the possibility of a divided congress in the United States.

A divided congress or balanced government means status quo, “which prevents big changes to health care and the tax code," said Darrell Cronk, president of Wells Fargo Investment Institute, as quoted on Some of Biden’s proposed policies (like tax hike) may not see an easy passage as chances of a balanced government are high.

Vaccine optimism (which indicates return to economic normalcy) and a divided congress (which indicates the likely reiteration of the existing policy matters) mean a steady rally in stocks. Both factors fueled Wall Street in recent sessions and will likely to do so in the coming days.

SPDR S&P 500 ETF Trust (SPY), SPDR Dow Jones Industrial Average ETF Trust (DIA) and iShares Russell 2000 ETF (IWM) added 1.27%, 3.01%, 3.71%, respectively, while the tech-heavy virus-winner Invesco QQQ Trust (QQQ) lost about 2.04% on the day.

Against this backdrop, below we highlight a few leveraged ETF areas that gained the most on Nov 9.


The coronavirus-led global slowdown crippled oil demand. Due to the second wave of the virus attack, major parts of Europe like Germany, France and the U.K. are under lockdown now. Citi recently slashed its 2021 Brent and West Texas Intermediate crude price outlook by $5 to $54 and $49, respectively. In such a scenario, the vaccine news has every reason to boost the energy sector. Microsectors U.S. Big Oil Index 3X ETN (NRGU - Free Report) (up 54.3%) and Microsectors 2X U.S. Big Oil Index ETN (up 35.3%) gained meaningfully on Nov 9.


Banking stocks have been rather beaten down in the past few months as fears of higher defaults at the household and corporate levels hit the space hard due to economic slowdown. So, banking stocks offer value now and have found room for growth.  Regional Banks Bull 3X Direxion (DPST - Free Report) (up 46.0%) and Microsectors 3X U.S. Big Banks ETN (BNKU - Free Report) (up 35.3%) were thus the notable winners for a valid reason.

High Beta

Vaccine optimism and a divided congress mean an upbeat stock market. Both factors fueled Wall Street in recent sessions and will likely to do so in the coming days. S&P 500 High Beta Bull 3X Direxion (HIBL - Free Report) advanced 35.1% on Nov 9.

Small Caps

Since small-cap stocks are more closely tied to the domestic economy, the latest hopes of a vaccine bode the best for the segment. No wonder, ETRACS 2xMonthly Pay Leveraged US Small Cap High Dividend ETN (SMHB - Free Report) added 23.6% on Nov 9.

Aerospace & Defense

If economic normalcy returns with the influx of vaccines, the likely Biden government may allocate a solid portion of the budget to defense spending. Commercial demand would also go up with economic stability. Also, the U.S. Federal Aviation Administration is in the final stages of reviewing likely changes to Boeing’s (BA) 737 MAX, per Reuters. This news has boosted the stock and the defense funds too. Overall, Aerospace Defense Bull 3X Direxion (DFEN - Free Report) jumped 21.1% on Nov 9.

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