Back to top

Image: Bigstock

5 Best Inverse-Leveraged ETFs of Last Week

Read MoreHide Full Article

Last week witnessed the largest collective loss for the "Magnificent Seven" technology-related stocks, with a total of $950 billion erased from their market capitalizations, as quoted on MarketWatch. This figure surpasses the previous record loss of $872 billion in January 2022.

High inflation, talks of higher-for-longer interest rates in the United States, flare-ups in geopolitical crisis and receding euphoria about AI investments weighed on the risk-on trade sentiments. High growth stocks were especially-marred due to surge in interest rates. Overall, the S&P 500 lost 3.1%, the Dow Jones advanced 0.01% and the Nasdaq plummeted 5.5%, respectively.

The benchmark U.S. treasury yield started the week at 4.63%, hit a closing high of 4.67% on Apr 16 and ended the week at 4.62%. Against this backdrop, below we highlight a few winning inverse-leveraged ETF investing areas that won last week.

Inverse-Leveraged Tesla

T-Rex 2X Inverse Tesla Daily Target ETF (TSLZ) – Up 33.3%

GraniteShares 2x Short TSLA Daily ETF (TSDD - Free Report) ) – Up 33.2%

Leading the decline in percentage terms, Tesla's stock slumped by 13.6%, reducing its market cap by $76 billion and dropping its ranking among the largest U.S. companies. Tesla’s continuous price cuts amid EV sales pressure weighed on its margin. The stock is down as much as 40.8% this year.

Inverse-Leveraged Semiconductor

Direxion Daily Semiconductor Bear 3x Shares (SOXS - Free Report) ) – Up 31.1%

T-Rex 2X Inverse NVIDIA Daily Target ETF (NVDQ - Free Report) ) – Up 29.5%

Experiencing the most significant absolute loss, Nvidia's market cap plunged nearly $300 billion due to a weekly stock drop of 13.6% and a historical single-day decline of 10% on Apr 19, 2024.

There was also ASML Holding's (ASML - Free Report) – a world leader in the manufacture of advanced technology systems for the semiconductor industry – announcement of a steep decline in bookings during the first quarter, catching investors off guard last week.

The news was crucial for the chip industry as ASML’s key customers include TSMC, Samsung and Intel, the world’s top processor foundries, which, in turn, make chips for AMD, Nvidia, Qualcomm and Apple, per CNBC (read: Pain or Gain Ahead of Semiconductor ETFs?).

Inverse-Leveraged FANG+

MicroSectors FANG+ Index -3X Inverse Leveraged ETN (FNGD - Free Report) ) – Up 28.8%

MicroSectors Solactive FANG & Innovation -3X Inverse Leveraged ETN (BERZ - Free Report) ) – Up 26.3%

FANG (Facebook, Amazon, Netflix, Google) – struggled last week due to higher rates, rich valuations andslight decline in euphoria related to Artificial Intelligence. In 2023, the global investment in AI recorded a consecutive decrease, according to a report from Stanford's HAI, as quoted on TechCrunch. Both private and corporate investments in AI witnessed a slump compared to the previous year, showing signs of diminishing enthusiasm.

Inverse-Leveraged Biotech

Direxion Daily S&P Biotech Bear 3x Shares (LABD - Free Report) ) – Up 20.3%

This sector underperforms in a rising rate environment. Biotech stocks — high growth and high-risk in nature — slumped last week, hit by a spike in bond yields.

The S-Network Electric & Future Vehicle Ecosystem Index constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.

Inverse-Leveraged High-Beta

Direxion Daily S&P 500 High Beta Bear 3X Shares (HIBS - Free Report) ) – Up 12.1%

The risk-off corner of the broad ETF world has been a gainful area to watch lately, given the heightened volatility and uncertainty. Amid concerns over inflation and potential shifts in Federal Reserve policy, stocks have faced challenges recently. On Thursday, remarks from Atlanta Fed president Raphael Bostic reinforced worries about interest rate cuts not happening until the end of the year. Amid such a scenario, inverse-leveraged high-beta ETFs seemed prudent investments.


See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

ASML Holding N.V. (ASML) - free report >>

Published in