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6 Best-Performing Leveraged ETF Areas of Last Week

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Last week was all about vaccine hopes that led to a stupendous Wall Street rally. 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 instigated a sharp market rally. The vaccine is the first to be tested in the United States to generate late-stage data. Apart from this, the global markets have been 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 stock market.

As a result, the S&P 500, the Dow Jones and the small-cap Russell 2000 index added 2.2%, 4.08%, 6.1%, respectively, while the tech-heavy the Nasdaq lost about 0.6%.

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


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. In such a scenario, the vaccine news has every reason to boost the economic growth, oil demand and the energy sector. Microsectors U.S. Big Oil Index 3X ETN (NRGU - Free Report) gained 61.5% last week.


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) added 39.6% last week.

High Beta

Vaccine optimism and a divided congress mean an upbeat stock market. Both factors fueled Wall Street. S&P 500 High Beta Bull 3X Direxion (HIBL - Free Report)  advanced 32.4%.

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 25.5% 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 defense funds too. Overall, Aerospace Defense Bull 3X Direxion (DFEN - Free Report)  jumped 32.7%.

Real Estate

This was another winning area as hopes for an improving economy ruled out fears about delayed or no rent payments. This along with a dovish Fed helped the real estate market. Direxion Daily MSCI Real Estate Bull 3X Shares (DRN - Free Report) gained 21.1% last week.

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