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5 Leveraged ETFs That Gained More Than 30% to Start 2023
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Wall Street staged a solid comeback at the start of 2023 as risk-on trading returned on hopes of easing inflation and the Fed’s slower rate hike path. The Dow Jones Industrial Average and the S&P 500 Index climbed 3.5% and 4.2%, respectively, while the tech-heavy Nasdaq Composite Index gained 5.8% (read: 5 Stocks Powering Nasdaq ETF to Start 2023).
This has resulted in huge demand for leveraged ETFs as investors sought to register big gains in a short span. We highlight a bunch of the best-performing leveraged equity ETFs from different corners of the market that gained more than 30% to start 2023. These include MicroSectors Travel 3x Leveraged ETN (FLYU - Free Report) , MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) , Direxion Daily Semiconductor Bull 3x Shares (SOXL - Free Report) , Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV - Free Report) and Daily S&P 500 High Beta Bull 3X Shares (HIBL - Free Report) . These funds will continue to be investors’ darlings, at least in the near term, provided the sentiments remain bullish.
Markets expect that the Fed could soon signal an end to its rate hiking cycle, propelling high growth and high beta sectors higher.
Inflation is easing and consumer confidence is rising, reflecting that the stock market will likely move higher. U.S. consumer prices unexpectedly fell for the first time in more than two-and-a-half years in December. Americans are regaining confidence in the U.S. economy, with the sentiment bouncing back in December and January and reversing consecutive declines in October and November. The US Michigan consumer sentiment survey hit a nine-month high of 64.6 in January, up from 59.7 in December.
A moderation in wage increases and a decline in U.S. services activity in December signal a slowdown in the U.S. economy and buoyed hopes of a less hawkish stance from the Fed. The latest job report showed that the United States added 223,000 jobs in December and the unemployment rate fell to 3.5%, matching a 50-decade low. However, wage growth lost momentum. All these factors have boosted investors’ risk appetite (read: 6 Sector ETFs That Show Promise After December Jobs Data).
MicroSectors Travel 3x Leveraged ETN offers three times (3X or 300%) exposure to the performance of the MerQube MicroSectors U.S. Travel Index. It has accumulated $5.2 million in its asset base since its debut in late June and charges 95 bps in annual fees.
MicroSectors Travel 3x Leveraged ETN trades in a paltry volume of 2,000 shares per day on average.
MicroSectors Gold Miners 3X Leveraged ETN seeks to deliver three times the performance of the S-Network MicroSectors Gold Miners Index. It has amassed $146.2 million in its asset base and charges 95 bps in annual fees (read: Gold Set to Shine in 2023: Bet on These ETFs).
MicroSectors Gold Miners 3X Leveraged ETN trades in an average daily volume of 283,000 shares.
Direxion Daily Semiconductor Bull 3x Shares targets the semiconductor corner of the technology sector with three times leveraged exposure to the ICE Semiconductor Index. Direxion Daily Semiconductor Bull 3x Shares has amassed about $4.5 billion in its asset base, while charging 89 bps in fees per year.
Volume is good as it exchanges 93.4 million shares per day on average.
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV - Free Report) - Up 33%
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares seeks to track the two times performance of the Indxx US Electric and Autonomous Vehicles Index. It has accumulated $2.7 million in its asset base
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares charges 95 bps in annual fees and trades in an average daily volume of 22.000 shares.
Daily S&P 500 High Beta Bull 3X Shares (HIBL - Free Report) – Up 31.7%
Daily S&P 500 High Beta Bull 3X Shares offers three times exposure to the performance of the S&P 500 High Beta Index. The index selects 100 securities to include in the index from the S&P 500 Index that have the highest sensitivity to market movements, or “beta” over the past 12 months.
Daily S&P 500 High Beta Bull 3X Shares has gathered $69.8 million in its asset base and trades in an average daily volume of 226,000 shares. The fund charges 95 bps in fees per year from its investors.
Bottom Line
As a caveat, investors should note that these products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing — when combined with leverage — may make these products deviate significantly from the expected long-term performance figures (see: all the Leveraged Equity ETFs here).
Still, for ETF investors bullish on U.S. stocks for the near term, either of the above products can be an interesting choice. Clearly, a near-term long could be intriguing for those with high-risk tolerance and a belief that the trend is a friend in this corner of the investing world.
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5 Leveraged ETFs That Gained More Than 30% to Start 2023
Wall Street staged a solid comeback at the start of 2023 as risk-on trading returned on hopes of easing inflation and the Fed’s slower rate hike path. The Dow Jones Industrial Average and the S&P 500 Index climbed 3.5% and 4.2%, respectively, while the tech-heavy Nasdaq Composite Index gained 5.8% (read: 5 Stocks Powering Nasdaq ETF to Start 2023).
This has resulted in huge demand for leveraged ETFs as investors sought to register big gains in a short span. We highlight a bunch of the best-performing leveraged equity ETFs from different corners of the market that gained more than 30% to start 2023. These include MicroSectors Travel 3x Leveraged ETN (FLYU - Free Report) , MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) , Direxion Daily Semiconductor Bull 3x Shares (SOXL - Free Report) , Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV - Free Report) and Daily S&P 500 High Beta Bull 3X Shares (HIBL - Free Report) . These funds will continue to be investors’ darlings, at least in the near term, provided the sentiments remain bullish.
Markets expect that the Fed could soon signal an end to its rate hiking cycle, propelling high growth and high beta sectors higher.
Inflation is easing and consumer confidence is rising, reflecting that the stock market will likely move higher. U.S. consumer prices unexpectedly fell for the first time in more than two-and-a-half years in December. Americans are regaining confidence in the U.S. economy, with the sentiment bouncing back in December and January and reversing consecutive declines in October and November. The US Michigan consumer sentiment survey hit a nine-month high of 64.6 in January, up from 59.7 in December.
A moderation in wage increases and a decline in U.S. services activity in December signal a slowdown in the U.S. economy and buoyed hopes of a less hawkish stance from the Fed. The latest job report showed that the United States added 223,000 jobs in December and the unemployment rate fell to 3.5%, matching a 50-decade low. However, wage growth lost momentum. All these factors have boosted investors’ risk appetite (read: 6 Sector ETFs That Show Promise After December Jobs Data).
We have profiled the ETFs in detail below:
MicroSectors Travel 3x Leveraged ETN (FLYU - Free Report) – Up 65.5%
MicroSectors Travel 3x Leveraged ETN offers three times (3X or 300%) exposure to the performance of the MerQube MicroSectors U.S. Travel Index. It has accumulated $5.2 million in its asset base since its debut in late June and charges 95 bps in annual fees.
MicroSectors Travel 3x Leveraged ETN trades in a paltry volume of 2,000 shares per day on average.
MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) – Up 43.4%
MicroSectors Gold Miners 3X Leveraged ETN seeks to deliver three times the performance of the S-Network MicroSectors Gold Miners Index. It has amassed $146.2 million in its asset base and charges 95 bps in annual fees (read: Gold Set to Shine in 2023: Bet on These ETFs).
MicroSectors Gold Miners 3X Leveraged ETN trades in an average daily volume of 283,000 shares.
Direxion Daily Semiconductor Bull 3x Shares (SOXL - Free Report) – Up 33.9%
Direxion Daily Semiconductor Bull 3x Shares targets the semiconductor corner of the technology sector with three times leveraged exposure to the ICE Semiconductor Index. Direxion Daily Semiconductor Bull 3x Shares has amassed about $4.5 billion in its asset base, while charging 89 bps in fees per year.
Volume is good as it exchanges 93.4 million shares per day on average.
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV - Free Report) - Up 33%
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares seeks to track the two times performance of the Indxx US Electric and Autonomous Vehicles Index. It has accumulated $2.7 million in its asset base
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares charges 95 bps in annual fees and trades in an average daily volume of 22.000 shares.
Daily S&P 500 High Beta Bull 3X Shares (HIBL - Free Report) – Up 31.7%
Daily S&P 500 High Beta Bull 3X Shares offers three times exposure to the performance of the S&P 500 High Beta Index. The index selects 100 securities to include in the index from the S&P 500 Index that have the highest sensitivity to market movements, or “beta” over the past 12 months.
Daily S&P 500 High Beta Bull 3X Shares has gathered $69.8 million in its asset base and trades in an average daily volume of 226,000 shares. The fund charges 95 bps in fees per year from its investors.
Bottom Line
As a caveat, investors should note that these products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing — when combined with leverage — may make these products deviate significantly from the expected long-term performance figures (see: all the Leveraged Equity ETFs here).
Still, for ETF investors bullish on U.S. stocks for the near term, either of the above products can be an interesting choice. Clearly, a near-term long could be intriguing for those with high-risk tolerance and a belief that the trend is a friend in this corner of the investing world.