For Immediate Release
Chicago, IL –March 4, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Direxion Daily S&P Biotech Bull 3x Shares (LABU - Free Report) , Direxion Daily Regional Banks Bull 3x Shares (DPST - Free Report) , Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN - Free Report) , Direxion Daily Industrials Bull 3X Shares (DUSL - Free Report) and Direxion Daily Small Cap Bull 3X Shares (TNA - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Leveraged ETFs that Soared More than 50% in February
The U.S. stock market continued its strong rally in February with all three main indices gaining at least 3%, representing their second straight monthly gains. In fact, the back-to-back months of strong rally represents the best start to year since 1987. Optimism over U.S.-China trade deal has been the biggest catalyst (read: Wall Street's Best Start Since 1987: Top ETFs of Top Sectors).
The Federal Reserve also played an important role in driving market sentiments. The central bank said that it will be patient in raising rates, citing mounting risks to the U.S. economy, including slowdown in Chinese and European economies and waning stimulus from the 2018 tax cuts. Lower interest rates will keep the borrowing cost lower, thereby resulting in higher consumer spending and thus stepped-up economic activities.
Aside from American markets, China stocks are worth noting as the major indices raged to a bull market last month after President Donald Trump delayed his plan for raising tariff on $200 billion worth of Chinese goods. In fact, Chinese stocks have seen the world’s best trade in February.
The stimulus and a wide range of reforms implemented by the Chinese government to revitalize its economic growth raised the appeal for these stocks since the start of the year. Further, MSCI’s move to quadruple the weighting of Chinese big caps (A-shares) for a number of its indexes led to immense confidence in the Chinese stock market (read: Trump Postpones Tariff Deadline: 5 Hot China ETFs Set to Rally).
All these fundamentals have resulted in huge demand for leveraged ETFs as investors seek to register big gains in a short span. Leveraged funds provide multiple exposure (i.e. 2x or 3x) to the daily performance of the underlying index by employing various investment strategies such as swaps, futures contracts and other derivative instruments. Due to their compounding effect, investors can enjoy higher returns in a very short period of time, provided the trend remains a friend.
Below we have highlighted some leveraged equity ETFs that have piled up more than 50% returns in February. These funds will continue to be investors’ darlings provided the sentiments remain the same.
Direxion Daily S&P Biotech Bull 3x Shares – Up 79.2%
This fund creates a 3x leveraged long position in the S&P Biotechnology Select Industry Index. It charges an annual fee of 95 bps and trades in a heavy average daily volume of about 3.3 million shares. The fund has AUM of $654.9 million (read: Wall Street Caps Best Month in Decades: 6 Top Leveraged ETFs).
Direxion Daily Regional Banks Bull 3x Shares – Up 75%
This fund seeks to deliver three times the returns of the S&P Regional Banks Select Industry Index, charging 95 bps in fees per year. It has accumulated $30.1 million in its asset base and trades in average daily volume of around 48,000 shares a day on average.
Direxion Daily Aerospace & Defense Bull 3X Shares – Up 73.1%
The fund creates a three times leveraged long position in the Dow Jones U.S. Select Aerospace & Defense Index. It charges an annual fee of 95 bps and trades in good average daily volume of more than 72,000 shares. The fund has accumulated AUM of $68.6 million (read: Why Aerospace & Defense ETFs are Soaring in 2019).
Direxion Daily Industrials Bull 3X Shares – Up 64.9%
This fund offers three times exposure to the daily performance of the Industrial Select Sector Index. It has accumulated $6.5 million in its asset base and the average daily volume is paltry at around 10,000 shares. Expense ratio comes in at 0.95%.
Direxion Daily Small Cap Bull 3X Shares – Up 56.8%
This ETF provides three times the return of the daily performance of the Russell 2000 Index and exchanges around 3.9 million shares in hand on average per day. The fund has AUM of $874.9 million and charges 95 bps in fees and expenses (read: 5 Small-Cap ETFs & Stocks Beating Russell 2000).
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