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5 Leveraged ETFs That Are Up More Than 50% in December
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After a blockbuster November, Wall Street extended its hot trend in December, with all three major indices recording new highs. The Dow Jones reached an all-time high, gaining about 6% this month. The S&P 500 touched a series of 52-week highs, with an increase of 5.5% and is just 0.5% away from its January 2022 record.
The surge came on the back of optimism that the Fed would cut its interest rates sooner than expected and that the U.S. economy would avoid a recession. This has resulted in increased demand for leveraged ETFs as investors seek 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 are leaders in their segments. These include GraniteShares 1.5x Long COIN Daily ETF (CONL - Free Report) , Direxion Daily S&P Biotech Bull 3x Shares (LABU - Free Report) , Direxion Daily Regional Banks Bull 3x Shares (DPST - Free Report) , Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL - Free Report) and MAX Auto Industry 3X Leveraged ETN (CARU - Free Report) . These funds will continue to be investors’ darlings going into the New Year, provided the sentiments remain bullish.
Broad market sentiments have turned extremely bullish following the Fed’s dovish tone this month. In the latest meeting, Federal Reserve Chair Jerome Powell hinted at a major policy shift as inflation is easing and the economy is holding up better. The central bank kept interest rates steady for the third time and penciled in three rate cuts of 75 bps for 2024. Lower interest rates generally lead to reduced borrowing costs, which can stimulate economic growth (read: Rate Cuts in the Cards: Bet on Leveraged Rate-Sensitive ETFs).
Recent indicators suggest that economic activity has been expanding at a moderate pace, buoyed by robust consumer spending, strong job gains and a low unemployment rate. Americans are now feeling more confident about the economy than they did over the past few months. U.S. consumer confidence jumped to a five-month high in December and retail sales posted surprise growth in November after declining in the prior month.
Leveraged ETFs
Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as the use of swaps, futures contracts and other derivative instruments to accomplish their objectives. Due to their compounding effect, investors can enjoy higher returns in a short period, provided the trend remains a friend.
Since most of these ETFs seek to attain their goals on a daily basis, their performances could vary significantly from the performance of their underlying index or benchmark over a longer period compared with a shorter period (such as weeks, months or years) due to their compounding effect (see: all Leveraged Equity ETFs here).
Investors should also note that leveraged ETFs involve a great deal of risk than traditional funds. They are often more costly and can be less tax-efficient, as they can see capital gains through the use of swaps and other derivative instruments.
GraniteShares 1.5x Long COIN Daily ETF (CONL - Free Report) – Up 78.2%
GraniteShares 1.5x Long COIN Daily ETF seeks 1.5 times (150%) the daily percentage change of the common stock of Coinbase Global Inc (COIN). It has accumulated $39.9 million in its asset base while trading in an average daily volume of 332,000 shares. GraniteShares 1.5x Long COIN Daily ETF charges 1.15% in annual fees (read: Bitcoin ETFs Set to Explode in 2024 After a Marvelous 2023).
Direxion Daily S&P Biotech Bull 3x Shares creates a three-times leveraged long position on the S&P Biotechnology Select Industry Index. It charges an annual fee of 0.95% and trades in a heavy average daily volume of about 2.2 million shares. Direxion Daily S&P Biotech Bull 3x Shares has AUM of $1 billion.
Direxion Daily Regional Banks Bull 3x Shares seeks to deliver thrice the returns of the S&P Regional Banks Select Industry Index, charging 89 bps in fees per year. DPST has accumulated $879.4 million in its asset base and trades in a moderate volume of around 1.7 million shares a day on average.
Direxion Daily Homebuilders & Supplies Bull 3X Shares provides leveraged exposure to homebuilders. It creates a three-times-long position in the Dow Jones U.S. Select Home Construction Index, charging an annual fee of 93 bps. Direxion Daily Homebuilders & Supplies Bull 3X Shares trades in a good average daily volume of about 320,000 shares and has accumulated $309.2 million in its asset base (read: Homebuilder ETFs 2024 Prospects Appear Bright).
MAX Auto Industry 3X Leveraged ETN (CARU - Free Report) – Up 51.8%
MAX Auto Industry 3X Leveraged ETN is linked to a three-times leveraged participation in the daily performance of the Prime Auto Industry Index. It charges 95 bps in annual fees and has accumulated $4 million in its asset base since its inception in June. MAX Auto Industry 3X Leveraged ETN trades under 1,000 shares a day on average.
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5 Leveraged ETFs That Are Up More Than 50% in December
After a blockbuster November, Wall Street extended its hot trend in December, with all three major indices recording new highs. The Dow Jones reached an all-time high, gaining about 6% this month. The S&P 500 touched a series of 52-week highs, with an increase of 5.5% and is just 0.5% away from its January 2022 record.
The surge came on the back of optimism that the Fed would cut its interest rates sooner than expected and that the U.S. economy would avoid a recession. This has resulted in increased demand for leveraged ETFs as investors seek 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 are leaders in their segments. These include GraniteShares 1.5x Long COIN Daily ETF (CONL - Free Report) , Direxion Daily S&P Biotech Bull 3x Shares (LABU - Free Report) , Direxion Daily Regional Banks Bull 3x Shares (DPST - Free Report) , Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL - Free Report) and MAX Auto Industry 3X Leveraged ETN (CARU - Free Report) . These funds will continue to be investors’ darlings going into the New Year, provided the sentiments remain bullish.
Broad market sentiments have turned extremely bullish following the Fed’s dovish tone this month. In the latest meeting, Federal Reserve Chair Jerome Powell hinted at a major policy shift as inflation is easing and the economy is holding up better. The central bank kept interest rates steady for the third time and penciled in three rate cuts of 75 bps for 2024. Lower interest rates generally lead to reduced borrowing costs, which can stimulate economic growth (read: Rate Cuts in the Cards: Bet on Leveraged Rate-Sensitive ETFs).
Recent indicators suggest that economic activity has been expanding at a moderate pace, buoyed by robust consumer spending, strong job gains and a low unemployment rate. Americans are now feeling more confident about the economy than they did over the past few months. U.S. consumer confidence jumped to a five-month high in December and retail sales posted surprise growth in November after declining in the prior month.
Leveraged ETFs
Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as the use of swaps, futures contracts and other derivative instruments to accomplish their objectives. Due to their compounding effect, investors can enjoy higher returns in a short period, provided the trend remains a friend.
Since most of these ETFs seek to attain their goals on a daily basis, their performances could vary significantly from the performance of their underlying index or benchmark over a longer period compared with a shorter period (such as weeks, months or years) due to their compounding effect (see: all Leveraged Equity ETFs here).
Investors should also note that leveraged ETFs involve a great deal of risk than traditional funds. They are often more costly and can be less tax-efficient, as they can see capital gains through the use of swaps and other derivative instruments.
GraniteShares 1.5x Long COIN Daily ETF (CONL - Free Report) – Up 78.2%
GraniteShares 1.5x Long COIN Daily ETF seeks 1.5 times (150%) the daily percentage change of the common stock of Coinbase Global Inc (COIN). It has accumulated $39.9 million in its asset base while trading in an average daily volume of 332,000 shares. GraniteShares 1.5x Long COIN Daily ETF charges 1.15% in annual fees (read: Bitcoin ETFs Set to Explode in 2024 After a Marvelous 2023).
Direxion Daily S&P Biotech Bull 3x Shares (LABU - Free Report) – Up 72.6%
Direxion Daily S&P Biotech Bull 3x Shares creates a three-times leveraged long position on the S&P Biotechnology Select Industry Index. It charges an annual fee of 0.95% and trades in a heavy average daily volume of about 2.2 million shares. Direxion Daily S&P Biotech Bull 3x Shares has AUM of $1 billion.
Direxion Daily Regional Banks Bull 3x Shares (DPST - Free Report) - Up 69.6%
Direxion Daily Regional Banks Bull 3x Shares seeks to deliver thrice the returns of the S&P Regional Banks Select Industry Index, charging 89 bps in fees per year. DPST has accumulated $879.4 million in its asset base and trades in a moderate volume of around 1.7 million shares a day on average.
Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL - Free Report) - Up 58.8%
Direxion Daily Homebuilders & Supplies Bull 3X Shares provides leveraged exposure to homebuilders. It creates a three-times-long position in the Dow Jones U.S. Select Home Construction Index, charging an annual fee of 93 bps. Direxion Daily Homebuilders & Supplies Bull 3X Shares trades in a good average daily volume of about 320,000 shares and has accumulated $309.2 million in its asset base (read: Homebuilder ETFs 2024 Prospects Appear Bright).
MAX Auto Industry 3X Leveraged ETN (CARU - Free Report) – Up 51.8%
MAX Auto Industry 3X Leveraged ETN is linked to a three-times leveraged participation in the daily performance of the Prime Auto Industry Index. It charges 95 bps in annual fees and has accumulated $4 million in its asset base since its inception in June. MAX Auto Industry 3X Leveraged ETN trades under 1,000 shares a day on average.