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Wall Street was downbeat last week with the S&P 500 (down 1.3%), the Dow Jones (down 0.3%), the Nasdaq Composite (down 3.9%) and the Russell 2000 (down 4.6%) seeing massive loses. This happened on the likelihood of faster monetary policy tightening by the Federal Reserve.
St. Louis Fed President James Bullard said that he seeks rising rates by 3% to 3.25% in the second half of 2022, while Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they favor raising rates to neutral. As a result, bond yields rose. The benchmark U.S. treasury yield jumped to 2.72% on Apr 8, 2022 from 2.42% recorded at the start of the week.
Last week’s data showed applications for U.S. state unemployment insurance dropped more than forecast, supporting the Fed’s argument that the economy is strong enough to endure faster rate increases. Growth stocks that underperform in a rising rate environment slumped heavily on such cues.
Against this backdrop, below we highlight a few top-performing inverse/leverage ETFs of last week.
As the growth-oriented tech stocks slumped last week on rising rate worries, this inverse-leveraged semiconductor ETF gained massively. The Direxion Daily Semiconductor Bear 3x Shares fund seeks daily investment results, before fees and expenses, of 300% of the inverse of the performance of the ICE Semiconductor Index.
Ultra Bloomberg Natural Gas ETF (BOIL) – Up 22.28%
Natural gas futures spiked to a fresh 13-year high on tight supply conditions, adverse weather conditions and declining inventories. The ProShares Ultra Bloomberg Natural Gas fund seeks daily investment results, before fees and expenses, that correspond to two times (2X) the daily performance of the Bloomberg Natural Gas Subindex (read: Tap Soaring Natural Gas With These ETFs).
ETFMG Alternative Harvest -2X ETF (MJIN) – Up 19.43%
The ETFMG 2X Daily Inverse Alternative Harvest ETF seeks daily investment results, before fees and expenses, that correspond to negative two times of the return of the Prime Alternative Harvest Index for a single day.
Although the U.S. House of Representatives voted to legalize marijuana -- for only the second time ever in history (per a Motley Fool article)– there was no enthusiasm for marijuana stocks as the passing in Senate is still due. The U.S. House passed the MORE Act in 2020 as well, only to see rejection in the Senate.
The ETFMG 2X Daily Inverse Alternative Harvest ETF seeks daily investment results, before fees and expenses, that correspond to negative two times of the return of the Prime Alternative Harvest Index for a single day.
Since a hawkish Fed caused a rally in long-term rates, ETFs that gives shelter against rising rates rose. PFIX is one such option. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income.
20+ Year Treasury Bear 3X Direxion (TMV - Free Report) – Up 17.9%
This is yet another winner of rising rates. The Direxion Daily 20+ Year Treasury Bear 3x Shares seek daily investment results, before fees and expenses, of 300% of the inverse of the performance of the ICE U.S. Treasury 20+ Year Bond Index.
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5 ETF Inverse/Leveraged ETFs of Last Week
Wall Street was downbeat last week with the S&P 500 (down 1.3%), the Dow Jones (down 0.3%), the Nasdaq Composite (down 3.9%) and the Russell 2000 (down 4.6%) seeing massive loses. This happened on the likelihood of faster monetary policy tightening by the Federal Reserve.
St. Louis Fed President James Bullard said that he seeks rising rates by 3% to 3.25% in the second half of 2022, while Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they favor raising rates to neutral. As a result, bond yields rose. The benchmark U.S. treasury yield jumped to 2.72% on Apr 8, 2022 from 2.42% recorded at the start of the week.
Last week’s data showed applications for U.S. state unemployment insurance dropped more than forecast, supporting the Fed’s argument that the economy is strong enough to endure faster rate increases. Growth stocks that underperform in a rising rate environment slumped heavily on such cues.
Against this backdrop, below we highlight a few top-performing inverse/leverage ETFs of last week.
ETFs in Focus
Semiconductor Bear 3X Direxion (SOXS - Free Report) – Up 24.1%
As the growth-oriented tech stocks slumped last week on rising rate worries, this inverse-leveraged semiconductor ETF gained massively. The Direxion Daily Semiconductor Bear 3x Shares fund seeks daily investment results, before fees and expenses, of 300% of the inverse of the performance of the ICE Semiconductor Index.
Ultra Bloomberg Natural Gas ETF (BOIL) – Up 22.28%
Natural gas futures spiked to a fresh 13-year high on tight supply conditions, adverse weather conditions and declining inventories. The ProShares Ultra Bloomberg Natural Gas fund seeks daily investment results, before fees and expenses, that correspond to two times (2X) the daily performance of the Bloomberg Natural Gas Subindex (read: Tap Soaring Natural Gas With These ETFs).
ETFMG Alternative Harvest -2X ETF (MJIN) – Up 19.43%
The ETFMG 2X Daily Inverse Alternative Harvest ETF seeks daily investment results, before fees and expenses, that correspond to negative two times of the return of the Prime Alternative Harvest Index for a single day.
Although the U.S. House of Representatives voted to legalize marijuana -- for only the second time ever in history (per a Motley Fool article)– there was no enthusiasm for marijuana stocks as the passing in Senate is still due. The U.S. House passed the MORE Act in 2020 as well, only to see rejection in the Senate.
The ETFMG 2X Daily Inverse Alternative Harvest ETF seeks daily investment results, before fees and expenses, that correspond to negative two times of the return of the Prime Alternative Harvest Index for a single day.
Simplify Interest Rate Hedge ETF (PFIX - Free Report) – Up 18.2%
Since a hawkish Fed caused a rally in long-term rates, ETFs that gives shelter against rising rates rose. PFIX is one such option. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income.
20+ Year Treasury Bear 3X Direxion (TMV - Free Report) – Up 17.9%
This is yet another winner of rising rates. The Direxion Daily 20+ Year Treasury Bear 3x Shares seek daily investment results, before fees and expenses, of 300% of the inverse of the performance of the ICE U.S. Treasury 20+ Year Bond Index.