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Inverse Equity ETF (SPDN) Hits New 52-Week High

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For investors seeking momentum, Direxion Daily S&P 500 Bear 1X Shares (SPDN - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up 18.5% from its 52-week low price of $27.50/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SPDN in Focus    

This ETF offers unleveraged inverse exposure to the daily performance of the S&P 500 index. It has accumulated $16 million in its asset base, while trades in average daily volume of 21,000 shares. The fund is cheap relative to other inverse products as it charges just 45 bps in annual fees (see: all the Inverse Equity ETFs here).

Why the Move?

The broad market has been an area to watch lately given that volatility and uncertainty have been playing foul. Myriad woes related to lingering U.S.-China trade tensions, slowing economic growth in Europe and Japan, troubles in emerging markets as well as threats of global slowdown have resulted in market gyrations. Additionally, renewed slide in oil price and the Fed’s lower-than-expected dovish view added to the woes. Given the bearish sentiments, investors are rushing to inverse ETFs that seek to register big gains in a short time span.  

More Gains Ahead?

It seems that SPDN might remain strong given a high weighted alpha of 12.23% but could be a risky choice as depicted by 20-day volatility of 21.01%. As a result, there is definitely still some promise for the risk-aggressive investors, who want to ride on this surging ETF.

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