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Best Leveraged ETFs of Last Week (Revised)

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Last week was downbeat for Wall Street with the S&P 500, the Dow Jones and the Nasdaq Composite losing about 1%, 0.6% and 0.7%, respectively. Uncertainty regrading the upcoming Fed meeting, renewed U.S.-China trade tensions and rising virus cases weighed on market sentiments. Moreover, the vaccine rally that charged up the markets in November, is also losing steam.

Against this backdrop, below we highlight a few leveraged ETFs that soared last week.    

S&P Biotech Bull 3X Direxion (LABU - Free Report) – Up 14.87%

The pharma and biotech sector has been a beneficiary of the divided Congress in the United States as well as researches on coronavirus vaccines. The rise of genomics is also another reason for the biotech rally. The space is also thriving on solid IPO activities.

Semiconductor Bear 3X Direxion SOXS) – Up 9.31%

Semiconductor stocks took a dive last week probably on profit booking. This is because semiconductor stocks soared the week before last thanks to the latest report from the World Semiconductor Trade Statistics (WSTS) which said the global semiconductor market is expected to increase 5.1% year over year this year driven by memory and sensors. The outlook is pretty upbeat for next year also.

Direxion Daily Russia Bull 2X Shares (RUSL - Free Report) – Up 7.9%

Brent crude prices touched $50/barrel for first time since March on COVID vaccine optimism. The rally in oil prices was fueled by hopes of a faster-than-earlier-expected demand recovery as countries start COVID-19 vaccination. Since Russia is an oil-rich country and a huge net exporter, the country ETF probably also benefited from the oil rally.            

Real Estate Bear 3X Direxion (DRV - Free Report) – Up 7.1%

The real estate sector has been suffering since the start of the pandemic. U.S. unemployment benefit claims shot up last week, per the Labor Department report. This was because the rising number of coronavirus cases hampered many businesses. Such status of employment had a negative impact on the real estate markets as tenants failed  to make timely rental payments.

Moreover, the real estate stocks (which is high-dividend paying in nature) are inversely related to the treasury yields. Overall, risk-on sentiments in Wall street boosted treasury yields in recent times. This, in particular, went against real estate ETFs, which is why this bear fund gained last week.

FTSE China Bear 3X Direxion (YANG - Free Report) – Up 6.16%

China stocks logged the biggest weekly loss in 11 weeks on Sino-U.S. tensions. The S&P Dow Jones Indices became the second key index provider (after FTSE Russell) to eliminate some Chinese companies from its index products following a Trump administration’ executive order. Also, the U.S. Federal Communications Commission said last week that it had started the process of withdrawing China Telecom's authorization to operate in the United States. This is the reason why this inverse leveraged China ETF advanced last week.

(We are reissuing this article to correct a mistake. The original article, issued on Dec 14, 2020 should no longer be relied upon.)

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